The emergence of crypto-currency is set to change the way we think about and deal with money. But what exactly is it, and how does it work? Crypto-currencies and the computing networks that power them have become a global phenomenon, the technology has so far been seen as disruptive to the banking sector in some countries, but can it provide the solutions majority of the unbanked don’t have? Are the crypto-currencies companies that we have in Uganda so far another Ponzi-scheme?
Understanding how these innovations work has become more critical than ever before. Ssebadduka Gonzaga an independent marketing associate at Onecoin says “The same way we go down the street and buy mobile money–which is a digital float, and we pay our paper money then we are sent digital money in our gadgets. So the same way we come with our local cash, put it somewhere, then the person responsible the other side will transfer the digital service into our mobile phones”.
And for now proponents of this digital gold, say the problem is most people, including policy makers don’t have a deep understanding of how these new networks operate, what they can do, and what risks and opportunities they present. “Other governments in the western nations, are moving to design their own systems in this case the block-chain system that can actually link with the available systems that are doing the transactions already. That way it becomes easy to regulate how this kind of movement is going around in and outside the country” Gonzaga adds.
While addressing the East African Bank of Governors conference last week, Mr Tumusiime Mutebuile, the Governor Bank of Uganda admitted that usage of e-currencies is gaining momentum in some countries. He acknowledged that the decentralized nature and multi-country reach of e-currency makes it hard regulate. In the past, some central banks either banned or discouraged the adoption of this currency.
Today, experts say that by speeding transactions and allowing the new anonymity of its users the sky might be the limit for crypto-currencies. For example, some of the investors in OneCoin a digital financial company in Uganda say that if someone paid UGX 700,000 now, and by June 2018 that person will be expecting about UGX 5.6 million, because currently the coin is at EUR 12.45 and by June next year it expected to be more than EUR 100.
The regional manager OneCoin Uganda Mr Ntabazi Fred says that his company has over 3,000 members in Uganda and in Africa they have over 700,000 members in a span of two years. And on a global basis, Onecoin has 3.2 million users. Unlike Europe, it appears this innovative yet disruptive technology continues to raise unexposed policy gaps and some African countries, Uganda inclusive and that analytics can help mine additional value by identifying patterns unearthing illegal activities.