Algeria, one of North Africa’s largest producers of oil and gas, is currently going through serious political and economic turmoil. Amid the current unrest, it’s perhaps high-time for the country to reconsider its position on Bitcoin as it has proven itself as a viable alternative during times of upheaval.
Algeria: Arab Spring 2.0?
Algeria, officially the People’s Democratic Republic of Algeria, is going through major political and economic turmoil. The country is the largest in Africa and it’s also amongst the biggest producers of oil and gas in the world. However, for the past few weeks, waves of protests and demonstrations have attempted to block the possible re-election of the current president Abdelaziz Bouteflika, who’s been serving on the post for 20 years.
Even though the president has promised to step down following the next elections scheduled for April 18th, demonstrations continued.
The current situation in Algeria painfully reminds of what happened in neighboring Tunisia as well as in Egypt back in 2011, which became known as the ‘Arab Spring.’ In Egypt in particular, millions of protesters from a broad range of socio-economic, as well as religious backgrounds, demanded the resignation of the long-standing Egyptian President Hosni Mubarak. He was an acting president from 1981 to 2011 – a total of 30 years.
Looking at Algeria, there’s a similar pattern when it comes to the current political structures. The country is run by an old president, supported by a reportedly corrupt political party, while Algeria’s economy is struggling. Problems such as mismanagement, paternalistic political views, as well as clientism are all at the forefront.
This comes in spite of the fact that Algeria is a large oil producer, having 12.2 billion barrels of proven oil reserves. The country exports about 540,000 barrels per day (b/d) or roughly half of its total production of about 1.1 million b/d.
Time to Lift Ban on Bitcoin
Following similar steps taken by its neighbor Morocco, Algeria banned bitcoin back in 2018 with the introduction of the country’s yearly Finance Act. Per the reports, not only is it prohibited to transact using Bitcoin, but also to hold it.
However, Bitcoin has managed to prove itself as a viable alternative to fiat currencies in times of political and economic unrest.
One such example would be Iran. Economic instability in the country due to US sanctions has led to hyperinflation of its national currency, the rial. This has resulted in some citizens seeking alternatives to access to the global economy as well as preserve wealth. Fortunately, Iran has relaxed its stance on Bitcoin earlier this year as it makes way for its own national digital currency, according to reports.
But perhaps the most notable example would be that of Venezuela. Once Latin America’s richest country, Venezuela is going through a political and economic crisis and severe hyperinflation, which reached a staggering 2.30 million percent in February.
Capital controls and a shortage of foreign currency have left residents with the only choice to secure their wealth through Bitcoin and other cryptocurrencies. As such, trading on peer-to-peer platform LocalBitcoins has surged in the country.
It also shows that Bitcoin is a lot more than just a speculative asset to people in countries facing economic and political instability. Therefore, perhaps it’s high time for the government in Algeria to reconsider its ban on Bitcoin and give its citizen the freedom to use an alternative to the Dinar, which has lost almost 80 percent of its value against the US dollar over the past 5 years.
What’s more, despite the official ban, the LocalBitcoins trading platform still works in Algeria, proving the politically neutral, decentralized and borderless nature of Bitcoin.
Would Algeria benefit from lifting the ban on Bitcoin? Don’t hesitate to let us know in the comments below!
Images via Shutterstock, xe.com