The Anglo-separatists in Cameroon have launched a cryptocurrency to raise funds for their independence movement to form a separate country called Ambazonia. While it is important to note that local groups desiring greater autonomy and independence are not new, what is entirely new and unprecedented is the establishment of a new crypto-economy to facilitate an independence movement that can spread virally with the help of social media.
Many local municipalities around the world are investigating and implementing local tokens or coins to fund local interests. The South Korean capital of Seoul is working on launching a token for the city. Even New York City is launching “Big Apple” coin. This new form of local money is not unique to any country or region. It is a global phenomenon, it is growing, and will impact almost every government in the world. This is part of a global trend for autonomy and independence. And while there are many benefits, the use of cryptocurrency poses significant challenges to traditional forms of governance.
Most governments around the world use their traditional financial systems and institutions to monitor, influence and control the members of their society. They do this to promote public safety, enforce laws and maintain an orderly society. This is done by collecting the economic resources from the population and redistributing it towards ends deemed appropriate by the government.
However, if the population perceives that leaders are using the financial system to personally benefit instead of using their power for the public good, there is increasing motivation to bypass the traditional financial systems and replace it with cryptocurrency. Cryptocurrency users bypass traditional banks and government-regulated institutions. This weakens government’s ability to maintain an orderly society.
As governments experience their influence diminishing, they are tempted to respond by actions that further drives cryptocurrency adoption and loss of governmental control. Several countries have launched failed attempts to “crack-down” on cryptocurrency adoption. Those countries have later revised their policies and had to admit that cryptocurrency use is here to stay and needs to be managed and incorporated wisely into the economic fabric of the nation.
People and organizations that use cryptocurrencies like AmbaCoin use them, in part, because of the expectation of anonymity. Cryptocurrencies promise anonymity by the fact that users are only known through their wallet ID. However, governments and law enforcement agencies are able to figure out the on-ramps and off-ramps through means of investigation that can allow them to build a database of known identifications that can lead them to those participating in illegal activities. There are currently organizations and agencies that use the transparent and immutable nature of blockchain ledgers to track transactions, even in the Dark Web. Empowered by the resources of governments, these tools are very powerful.
Other options include government-issued cryptocurrencies. These coins (sometimes referred to as Stable Coins) are difficult to implement and difficult to establish economic and trust models needed for a coin to be viable. However, if they make it to viability and adoption, they could lead to the type of oversight and monitoring appropriate for approved use in a legitimate economy.
Establishing a regulatory framework for cryptocurrency use requires a blend of policies that limit illegal activity without stifling innovation and economic growth. Law enforcement officials need analytical tools to identify and prevent illicit activity like money laundering, tax evasion, human trafficking, arms, and drug smuggling. Regulators need to adopt policies that ensure a stable environment for investment, innovation, education, and employment to stabilize and grow the economy during a transition period between fiat and cryptocurrencies.
Governments around the world are working with GBA members like the Blockchain Intelligence Group (BIG) to help governments implement these type of policies and structures to ensure that the rights of individuals are maintained and the legitimate structures of government are upheld. There are no easy solutions, which is why we need a network of thought leaders, technologists, and implementers. One area that requires careful thought is the ICO (Initial Coin Offering) of the new cryptocurrency put forth by Ambazonia. A brief discussion is needed of the challenges facing ICO’s in general.
Currently, there is a great deal of skepticism toward ICO’s. In 2017 and early 2018, there was a rush of people to invest in new coins. However, many of these were exposed as either outright frauds or poorly planned cryptocurrencies which collapsed shortly after launching, taking all the investments with them. The US SEC (Security and Exchange Commission) has also been more aggressive with regulation and education with the goal of curbing ICO’s that may be intentionally or unintentionally swindling consumers. All of this has made ICO’s less attractive. This may blunt a national cryptocurrency, like Ambacoin, from reaching the market cap it desires.
Also, as mentioned previously, there is a great risk for failure of new currencies through poor planning, mismanagement, sloppy security, etc. These factors can undercut the aspirations of new crypto and cause the coin to fail, dragging down investors and further increasing skepticism towards cryptocurrencies.
Due to these problems we have listed above, this diminishes the prospect of AmbaCoin becoming as successful as Ambazonia has hoped. However, the situation has shown that the concept of Ambazonia has a high draw for many people – especially those who favor the plight of the English-speaking separatists. The emotional component is a key factor here for AmbaCoin’s success. Excessive responses by the Republic of Cameroon will push people to invest in this currency as a show of support and solidarity.
There are many geopolitical concerns that could be addressed concerning AmbaCoin. However, it should be noted that the technology underlying AmbaCoin is here to stay. Blockchain has already been a powerful, disruptive force that has been impacting institutions and individuals all over the world. It is important for the Republic of Cameroon to recognize that in the midst of dealing with Ambazonia, they do not react against the technology itself. Such a course of action will push blockchain adopters and sympathizers to invest in Ambazonia, since they have adopted this new technology with open arms.
New technology always comes with new challenges. Disruption is one of the biggest challenges, as the new technology can make old methods and procedures obsolete. This impacts all aspects of society, from the top echelons of government, all the way down to the ways of life for the individual. Because of this, disruption can cause a tremendous backlash, as people try to maintain the familiarity of what they know.
Blockchain, with its distributed network, is highly disruptive to many institutions and is, therefore, a prime target for backlash. However, knee-jerk reactions to new technologies rarely stop their advance; instead, they drive adopters to use other means of implementation. An alternative to a backlash against technology would be thoughtful, careful approach. This is where GBA stands out. As an international network of blockchain professionals, with members on the cutting edge of implementation, our association has the cumulative experience and know-how to help governments to navigate the uncharted territory of blockchain implementation into specific government contexts.
A disruptive technology can be destructive if not managed properly. But, the disruption can be harnessed for the benefit of citizens and governments alike and used to increase security and prosperity for all.