Financial Implications of Crypto Currency (Bitcoin) for the Ghanaian and Other Economies

Abstract

In January 2009, the whole world was introduced to a new financial invention called Bitcoin. This coin is intended to accelerate globalisation of the financial market. Significantly, the inventor is credited as the first to succeed in solving the double-spending challenges associated with digital currency. Prior to the invention, a white paper about the bitcoin was authored and released in 2008under the name, Satoshi Nakamoto. However, the name, Satoshi Nakamoto, remains a mystery; the original inventor of the bitcoin remains a mirage to the financial world. Some analysts believe a pseudonym, rather than an original name, was used in creating the bitcoin. The main purpose of this research was to assess the financial impact of crypto currency, specifically bitcoin, on the Ghanaian and other economies across the globe. The systematic exploratory technique, an example of the mixed methods approach to scientific inquiry, was adapted for this research. Data required for the conduct of this research were obtained mainly from secondary sources. These included text books, journals, newspaper publications, and digital currency markets.Findings from the research revealed divergent views on the prospects of bitcoins in the medium- and long-term: some experts believed a bitcoin would soon trade at 1BTC: US$12,000 while others believed the future of the digital currency cannot be predicted with relative ease, what would become of the bitcoin in the medium- and long-term. The findings revealed some price volatilities in the bitcoin market. This notwithstanding, the digital currency has made remarkable strides in value since 2009 till date. The study recommended the need for governments to introduce measures that would ensure anti-money laundering, and "know-your-customer” controls; reduce the level of anonymity and privacy to eventually minimise use of bitcoins in criminal activities. There is the need for intelligence agencies of governments to engage the services of individuals who are technologically savvy to understand, operate and control the bitcoin system, which is technologically more complex than most of the computer systems used in day-to-day operations in various organisations. Institutions of higher learning and professional bodies could integrate the study of crypto currency into individual business related programmes.