Home Africa President Museveni upbeat about cryptocurrencies and blockchain

President Museveni upbeat about cryptocurrencies and blockchain

417
0
SHARE
President Museveni, courtesy of blockchain association of Uganda
President Museveni, courtesy of blockchain association of Uganda

‘Cryptocurrencies present an interesting proposition about the evolution of money’ these statements represented the core of speech given by President Museveni during the recently concluded Africa Blockchain Conference  in Kampala, Uganda. The president spoke after the governor of Bank of Uganda had earlier in the same event cautioned the people against dealing in cryptocurrencies.

He noted that the value of money as we know it today has undergone various changes in the course of its existence. Up to 1930s, the Gold standard was accepted in many countries. In the Great Lakes regions, cowrie shells were used as a unit of account. All these were used because they were scarce and they were accepted by many people to represent value/money. Gold became fiduciary, meaning that a paper was used to signify the amount of Gold held by a person since Gold was bulky to carry. Therefore Gold moved from intrinsic value to fiduciary because people trusted the paper to represent the amount of Gold held. Eventually, people forgot the gold and papers were used as a trusted unit of account even without the intrinsic value, Gold. Eventually, paper money became a mainstream form of representing value. It was backed by countries.

The president was therefore upbeat that money is based on what people put their trust on. He was optimistic that cryptocurrencies could provide an interesting angle where the world once more moves to a different way of having and transferring value. He, however, noted that still some questions needed to be answered about cryptocurrencies in order to ensure mass adoption.

He challenged the audience to try and answer how cryptocurrencies would surpass the national currency.  He was optimistic that Uganda and the continent at large should not be left out in trying to figure how best to adopt cryptocurrencies that are unique to Africa’s situation.

Keen understanding of blockchain technology

In showing his understanding of blockchain and how it works, the president articulated that it is based on three fundamental aspects:

Trust: unlike in the current system where trust is only limited to small group of people or institutions, blockchains presented universal trust where everyone in a system has a way of trusting the system because of the way it is constituted to ensure no one cheats. He gave an analogy of a global cooperative whereby everyone trusts each other; however, unlike a cooperative whereby only a few are knowledgeable about whole operations and control the activities, in the blockchain, everyone has equal knowledge as the other. This is what it means to be in a decentralized network.

Access and transparency: He further explained that Blockchain is simply records books that are open for everyone to see. Opaqueness is therefore removed when transacting with different parties.

Organised structure; blockchain have organized governance structure that stipulates who does what and authority is not bestowed on one person. This means that they present opportunities for us to work better with organized systems than the prevailing ones.

He gave an example that if for example, he has 100 bulls, they are recorded on the blockchain that he has 100 bulls. If he tries to sell some of them, the transaction is undertaken on the blockchain and he receives currency in exchange of say 10 bulls. The records now show that he has 90 bulls and it cannot be altered. Such transactions can be undertaken on the blockchain from anywhere in the world as long as there is internet connectivity and at fraction of cost.

He concluded his speech by saying Uganda would ensure regulatory frameworks that govern cryptocurrencies and blockchain in Uganda.  He said despite the nascent nature of blockchain technology, it was unwise to ignore it since it would curtail innovation and fail to capture any potential benefits it presents.

LEAVE A REPLY

Please enter your comment!
Please enter your name here