Cointelegraph recently traveled to Cape Verde, West Africa, to explore whether Bitcoin (BTC) could be a tool for progress.
In the latest on-the-ground video documentary from Cointelegraph, global reporter Joe Hall investigates the remittances market, cash economies, and the challenges and opportunities faced by small island nations worldwide.
Cape Verde, officially the Republic of Cabo Verde, is an island nation in the central Atlantic Ocean. Cape Verde comprises 10 main islands and several smaller islets, sitting 570 kilometers (350 miles) west of Senegal, West Africa.
Hall discovers that more Cape Verdeans live abroad than on the country’s islands. Due to its small land mass, it struggles to cultivate and export goods abroad. The islanders of Cape Verde, especially Sal, rely on tourism to stimulate the economy, and relatives living abroad send money home.
The combination of a tourism and remittance-based economy presents multiple issues. Due to the presence of tourists year-round, Sal uses three currencies: the local Escudo, the U.S. dollar, and the Euro, although Hall discovered it’s also possible to pay in British pounds. Mastercard and Visa charge upward of 4% for transaction fees in stores, which merchants often pass on to customers.
Western Union and MoneyGram charge customers as much as 15% for remittances to send money across borders. The high remittance costs act like a tax on the higher incomes of Cape Verdean workers living abroad.
The Cape Verde cash economy is also hamstrung by high ATM and bank access fees, as well as strict opening and closing hours. Cape Verdean banks close at 5:00 pm local time on the islands, and during bank holidays, ATMs often run out of cash for withdrawal, presenting further economic hurdles for full-time workers.
Finally, inflation runs higher in Cape Verde than across the eurozone, even though the escudo is “pegged” to the euro. Compared with Western economies, the islands’ incumbent financial systems impede Cape Verdeans from simply spending, saving and sending money the way many Westerners take for granted.
While investigating these economic issues, Hall met with Renato Evarchi, one of the first business owners in Cape Verde to accept Bitcoin. He shed light on the economic situation and explained how more and more Cape Verdeans were warming up to a borderless, immutable and decentralized internet currency.
To learn more from Hall’s travels in Cape Verde, watch the full documentary above and subscribe to Cointelegraph’s YouTube channel.