CFA region monetary dependence on France and how Bitcoin can end it

Did you think colonization times were over? You may change your mind if you take a closer look at the monetary dependence of the CFA countries on France.

We believe that the CFA should end now, and Bitcoin take over. Here’s why.

The CFA was created to provide monetary stability to the former French colonies, but it ended up giving France more control over their finances than it could be deemed decent. Used by 14 Sub-Saharan African states, it was pegged to the French franc 1:2 in 1948. By the time franc was changed to euro in 2002, the peg was 1:0.1, for a total devaluation of 19’900%. Throughout this period France was the one who decided on every change of peg (backed by the IMF when needed). But there’s more:

? CFA countries must keep 100%, and after 1970 – 65% of their reserves in France (8 West-African countries could finally withdraw their funds in May’21). This has been preventing African nations from creating a proper domestic credit market.

? CFAs being exchangeable only to francs (later-euro) in a French currency market, CFA countries’ international payments all run through Paris. France also has a special privilege of first right of refusal on imports and exports, meaning it could get lower-than-market products and sell its services higher-than-market.

? CFA banknotes and coins are still made in France and French officials still sit on the boards of the regional central banks, holding de facto veto power.

Being monetarily dependent on France has undoubtedly weakened CFA countries’ chances to build healthy economies. However, there’s no way to say if it would have been better under another country’s monetary tutelage or without any at all. CFA system was able to hedge the region from hyperinflation like in Zimbabwe, and provide external economic relations with France, even somewhat unfair.

Now, however, the CFA time is over. Monetary independence is the only thing that could help African states to take off and develop their economies themselves. We think that the ultimate tool for such independence is Bitcoin – free from bureaucracy and corruption, available to everyone, scarce, independent… 182 M people living in the CFA area can finally get their independence.

As the actor Hill Harper said, “They can’t colonize Bitcoin”.

This article was inspired by the book “Africa’s Last Colonial Currency: The CFA Franc Story” by F. Pigeaud and N.S. Sylla and Bitcoinmagazine coverage by A. Gladstein.