Cointelegraph recently embarked on a journey to Cape Verde, West Africa, in order to delve into the potential impact that Bitcoin (BTC) could have on progress and development in the region.
In a thought-provoking video documentary, Cointelegraph’s global reporter, Joe Hall, sets out to explore various aspects of the Cape Verdean economy, including the remittances market, the prevalence of cash transactions, and the unique challenges and opportunities faced by small island nations across the world.
Cape Verde, officially known as the Republic of Cabo Verde, is an archipelago situated in the central Atlantic Ocean. Comprising of 10 major islands and a number of smaller islets, Cape Verde is located 570 kilometers (350 miles) west of Senegal, West Africa.
Hall’s investigation uncovers a surprising fact: there are actually more Cape Verdeans living abroad than there are residing on the islands themselves. This is primarily due to the country’s limited land mass, which inhibits its ability to cultivate and export goods internationally. As a result, the economy of Cape Verde heavily depends on tourism and the remittances sent by relatives living abroad.
Nevertheless, the combination of a tourism-based economy and heavy reliance on remittances poses significant challenges. Given the constant presence of tourists, the island of Sal, in particular, operates with three different currencies: the local Escudo, the U.S. dollar, and the Euro. Surprisingly, British pounds are also accepted as a form of payment. However, Hall discovers that this multi-currency system comes with additional costs, as Mastercard and Visa charge transaction fees of up to 4% in stores, fees that are often passed onto the customers by the merchants.
Sending money across borders through services like Western Union and MoneyGram also comes at a high cost, with fees reaching as high as 15% of the remittance amount. These exorbitant charges effectively act as a tax on the incomes of Cape Verdean workers living abroad.
Moreover, the cash economy in Cape Verde faces additional obstacles such as expensive ATM and bank access fees, as well as strict opening and closing hours. Banks in Cape Verde close at 5:00 pm local time on the islands, and during bank holidays, ATMs frequently run out of cash for withdrawal. These factors present further economic hurdles for full-time workers on the islands.
Inflation rates in Cape Verde also tend to be higher than those experienced across the eurozone, despite the fact that the escudo is “pegged” to the euro. Consequently, Cape Verdeans find themselves hindered by their current financial systems, unable to easily spend, save, and send money in the same manner as their Western counterparts.
Despite these challenges, Hall’s investigation uncovers a glimmer of hope. During his journey, he encounters Renato Evarchi, one of the first business owners in Cape Verde to accept Bitcoin. Evarchi sheds light on the economic situation in Cape Verde and explains how an increasing number of Cape Verdeans are embracing the idea of a borderless, immutable, and decentralized digital currency.
To gain deeper insights into Hall’s exploration of Cape Verde, watch the full documentary above and subscribe to Cointelegraph’s YouTube channel.
In summary, Hall’s visit to Cape Verde shines a light on the unique economic challenges faced by small island nations like Cape Verde. From the heavy reliance on remittances and the impact of a multi-currency system to the high fees associated with remittances and limited access to banking services, the hurdles are numerous. However, there is also a growing openness to new solutions, such as Bitcoin, that offer the potential for a more inclusive and efficient financial system. As Cape Verde continues to grapple with these challenges, the cryptocurrency industry may hold promise as a tool for progress and development.
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