Groupe Nduom Urges Bank of Ghana to Buy Bitcoin

Banks all over the world are not too keen on the idea of using Bitcoin. In some cases, they may even prevent their customers from buying or selling cryptocurrency. Over in Ghana, things are seemingly a bit different. Groupe Nduom’s Papa-Wassa Chiefy Nduom has urged the Bank of Ghana to put 1% of its holdings into Bitcoin. It’s a very interesting train of thought, although it remains to be seen if the institution will pay any attention to the suggestion.

Bank of Ghana Needs to Diversify

All financial institutions around the world have to keep a few basic rules in mind at all times. Diversifying their portfolios and holdings is one of those rules which a lot of banks seemingly forget every now and then. At the same time, it has become far more difficult to diversify a bank’s holdings into vehicles which will generate a fair amount of profit. The choices are especially limited when it comes to stocks, bonds, and precious metals. Finding other solutions needs to be the top priority, but it remains unclear which options are being considered.

If it were left up to Groupe Nduom, Bitcoin would be the only logical choice in this regard. While the group’s vice president, Papa-Wassa Chiefy Nduomis convinced that the Bank of Ghana should diversify one percent of its holdings into Bitcoin, it is highly doubtful that the central bank will follow that advice. After all, most financial experts are still concerned that Bitcoin is in a bubble. It is certainly one of the most speculative assets out there and can experience some very wild price swings on a daily basis.

One thing to keep in mind is that every single form of investment is always a gamble. Buying stocks from major companies can also set investors back pretty quickly if things go awry. Bitcoin is no different in this regard, even though it doesn’t have the mainstream appeal of other investment vehicles. Worrying too much about potential risks makes all investment opportunities look bad from the get-go. However, there is no reason to ignore the risks either, as doing so could lead to even more trouble in the long run.

We live in a very interesting era when it comes to global finance. Central banks can no longer afford the investment opportunities which stare them in the face every single day. While it would certainly be interesting to see the Bank of Ghana diversify its holdings into Bitcoin, it is highly unlikely that it will do so anytime soon.

Papa-wassa Chiefy Nduom commented as follows:

On the investment case, for a central bank, especially for a country that needs to come up with solutions, we need more funding for investments and my view is, by making that investment and by signalling that it’s an enabling environment for investments. For example, if the exchange is domiciled in Ghana[,] trades in the digital currency will not be subject to tax or capital gains but will tax the profit that the exchange is made. That could result in massive inflows of foreign currencies to Ghana.

It is certainly true that central banks may want to look into Bitcoin and other cryptocurrencies moving forward. There is a lot of money to be made in crypto, even though its total value is still very low in comparison to more traditional vehicles. If the Bank of Ghana were to put 1% of its reserves into Bitcoin, it would certainly send some shockwaves throughout the cryptocurrency industry. Whether or not that would be positive or negative remains to be determined, though.