Vice president of Group Nduom, Papa-Wassa Chiefy Nduom has urged the Bank of Ghana to diversify its investment by placing some of its funds in bitcoin.
He urged the central bank to invest about one percent of Ghana's reserves in bitcoin.
Mr Ndoum said, “I don’t think it’s a gamble, I think every investment is a gamble, getting out of your bed in the morning is a gamble. If you are completely preoccupied with risk you won’t do anything… in terms of managing reserves there is potentially a new reserve asset and as a central bank, you need to study blockchain.
He said, “Everybody agrees with that now…IMF and the rest, they’ve all said blockchain is potentially disruptive technology. Some people think it will get rid of banks. So as a central bank, you’ve got to pay attention.”
In an exclusive interview with JoyBusiness, Mr Ndoum said Ghana can have a lot of foreign exchange with the right investments in the digital currency.
He said, “On the investment case, for a central bank, especially for a country that needs to come up with solutions, we need more funding for investments and my view is, by making that investment and by signalling that it’s an enabling environment for investments. For example, if the exchange is domiciled in Ghana trades in the digital currency will not be subject to tax or capital gains but will tax the profit that the exchange is made. That could result in massive inflows of foreign currencies to Ghana.”
“For central banks in Africa, 13 of them that I have studied, in 2016 term, they had about $111 billion in reserves and it’s also projected that the dollar may fall, against other currencies and they [central banks] already have an imperatives to rebalance their dollar holdings based on the current view of where the dollar may go. So for them [central banks] they have to rebalance anyway or they are going to lose money; potentially,” he said.
Mr Ndoum said central banks in Africa “may buy euros, Swiss franc, or Australian dollar or New Zealand dollars but they can also invest in this [bitcoin] because big investors in the world believe that this [bitcoin] will be a new digital reserve currency and reserve currencies are for central banks, and the central banks also have the technical capability to make a decision on this.”
He believes that the digital currency is the future of value and banking, “They [central bank] have the people and staff who can study the technology, the regulation and can make a decision.”
“I think that they are probably the best entities [central banks] positioned to make an initial bet on this technology because it’s the future of value and banking and as I mentioned many prominent investors are backing this technology and we as a poor country cannot risk being left out on it again,” he said.
Bitcoin is a digital currency created in 2009. It offers the promise of lower transaction fees than traditional online payment mechanisms and is operated by a decentralized authority, unlike government-issued currencies.
Today's market cap for all bitcoin in circulation exceeds $7 billion. It can be used to purchase goods and services.