Exploring Bitcoin's Potential for Economic Growth in Cape Verde
Summary:
Cointelegraph visited Cape Verde to explore Bitcoin's potential in economic development. The challenges for the island nation include high remittance costs, heavy ATM fees, restrictive bank hours, and elevated inflation rates compared to the Eurozone, despite its currency being linked to the Euro. The unique economy, based on tourism and remittance, led to market oddities like 'confused change'. Meeting Renato Evarchi, the first business owner in Cape Verde to accept Bitcoin, highlighted growing interest in a borderless, immutable, and decentralized currency among Cape Verdeans.
Cointelegraph recently embarked on a journey to Cape Verde, located in West Africa, to delve into the potentials of Bitcoin (BTC) as a catalyst for development. In a newly filmed, on-the-ground documentary, Cointelegraph's global correspondent Joe Hall delves into the realm of money transfers, cash-based economies, and the unique obstacles and prospects faced by small island nations globally. The Republic of Cabo Verde, commonly known as Cape Verde, is an archipelagic state situated in the central part of the Atlantic Ocean. Cape Verde is composed of ten major islands and numerous smaller ones, positioned 570 kilometers (approximately 350 miles) west of Senegal, in West Africa.
Hall discovers that the expatriate Cape Verdean population exceeds the number of inhabitants residing on the islands. The country is confronted with the challenge of producing and exporting goods due to a lack of extensive land area. The residents of Cape Verde, particularly those in Sal, depend on tourists for economic stimulation, with their overseas relatives contributing by remitting money.
The economy, primarily fueled by tourism and remittances, poses numerous issues. The inflow of tourists throughout the year results in Sal housing three currencies: the local currency Escudo, the US dollar, and the Euro, while also accepting British pounds. Moreover, Mastercard and Visa transactions entail a minimum fee of 4% in stores, a cost often shifted to consumers.
Transactions at physical shops resulted in Hall receiving 'confused change' — a blend of Euros and Escudos. According to Cointelegraph sources, prominent money transfer companies like Western Union and MoneyGram levy as high as a 15% fee for cross-border money transfers. These elevated costs inadvertently tax Cape Verdean expatriates with higher earnings.
The Cape Verdean cash economy is further crippled due to exorbitant ATM and banking service charges, coupled with strict operational hours. Local banks in Cape Verde adhere to a closing time of 5:00 pm, and ATMs frequently run out of cash during bank holidays, thereby escalating economic barriers for full-time employees. Lastly, inflation in Cape Verde is significantly higher compared to the Eurozone, despite the Escudo being closely linked to the value of the Euro. Compared to Western economies, the existing financial systems on the islands hinder Cape Verdeans from performing basic financial activities such as spending, saving, and remitting money, things that are usually taken for granted in the West. For more insights into Hall’s exploration in Cape Verde, tune into the complete documentary above and subscribe to Cointelegraph’s YouTube channel.
While Hall was investigating these economic troubles, he encountered Renato Evarchi, a pioneer among Cape Verde business owners who accepts Bitcoin. Evarchi offered insights into the economic predicaments and elucidated how an increasing number of Cape Verdeans are becoming accepting of an uncensored, unalterable, and decentralized Internet currency.
Published At
10/30/2023 4:02:30 PM
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