When I first heard that Akon was setting up a city in Senegal, I was curious to know why a man known for selling records would shift business lines to infrastructural development. Besides cities are built by countries not even wealthy local businessmen. Maybe, it would have been easier for him to create local branches of Konvict Music across the continent and focus on signing 54 artistes hoping to push them to global success.
Then I heard that his city was going to use ‘A Coin’ a cryptocurrency as the medium of exchange. I figured out the business model. When I watched his interview with Canary Mugume this evening, I became even more convinced that this is what this whole thing is really about.
Globally in developed and some developing countries, cryptocurrencies are growing in popularity but governments are still suspicious of them because it takes away control of the monetary system from the state. As the capital base and market values of different cryptocurrencies grow, investors in these transactional systems have sought to mainstream them.
Olga Kharif (2021) reports for Bloomberg (on April 5, 2021) that the global market for cryptocurrencies now stands at USD 2 trillion. And it is growing by the day.
Some businesses here have been quietly financed by cryptocurrency magnates to set up radio and television stations to push cryptocurrencies. Others have been quietly financed to set up schools of entrepreneurship. Others have been quietly financed to set up SACCOs. Eventually, investors in cryptocurrencies from abroad believe the future for this model of finance is to mainstream it. Normally to make it relevant, they pepper the idea with personal financial development.
Akon will use cryptocurrency in his city. That already means that currency will co-exist with the Uganda Shilling and numerous other foreign currencies in Uganda.
So, whoever is wondering if he has the money, or whether he is in dreamland, know that Akon is most likely going to create a billion-dollar industry in Africa running on cryptocurrency. And the investors to make this happen are more than enough in foreign countries.
I hear that investors in the cryptocurrency business hope that its variants will be international means of quid pro quo by 2030. Akon’s target is by 2036. The two projections are almost in sync. I foresee him trying to close other deals with other African countries, because Africa is actually a fertile ground for the penetration of cryptocurrency.
Of course, government is not paying attention to that, it has simply accepted his ideas. Why? The public relations value exceeds by far the risk of a currency that is digital. At a time when there is so much negative publicity about Uganda in the Western media, Akon (one of the biggest global superstars of the last 15 years-who even recorded with Michael Jackson) serves to bring some good news about the country. So, government that has through Bank of Uganda previously issued stern warnings about use of the potentially volatile cryptocurrencies (and their pyramid models) is not attending to that aspect of the deal. It has offered three sites for his choice. I am sure he will successfully build that city, if his source of finance is a blend of his own money and proceeds from cryptocurrency markets across the globe.
We wish him well and watch the project unfold.
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