Cryptocurrencies against capital flight – BitcoinBlog.de – the blog for Bitcoin and other virtual currencies

Capital flight is a massive, very expensive problem for Africa. A Nigerian regulator is now recommending at a pan-African event that we combat it using blockchains and AI. He probably means stablecoins.

At a pan-African conference on illicit wealth flows in Tunis on June 27, Olanipekun Olukoyede, head of the Nigerian Economic and Financial Crimes Commission (EFCC), presented a shocking figure: $88.6 billion. That is how much capital illegally flees the continent every year.

Olanipekun Olukoyede delivers the keynote address at the conference in Tunis.

Corporations evade taxes, kleptocrats rob countries, the rich secure their profits, and the money ends up in bank accounts abroad, in Switzerland, the Bahamas, Dubai, and so on. If we could stop the flight of capital, it would be the best possible development aid for the continent. With this money we could build so many roads, hospitals, bridges, desalination plants, solar power plants, schools, and so on.

Olukoyede then explained that blockchain and AI could be a solution to the problem. They could make financial transactions more transparent, making it harder for criminals to conceal their activities. By following the trail of money, it can often be repatriated from abroad, something that Olukovede said was achieved in 2020 with $311 million sent to the US by a “Nigerian leader.”

The same technology could also be used to make financial institutions more efficient and reduce fraud and corruption – a massive problem, especially in Nigeria.

When Olukovede says “blockchain and AI,” he remains rather vague. What he probably means is “bitcoin and stablecoins” and “blockchain analysis.” If Bitcoin, Tether, DAI or USDC were circulating as currencies in Africa, blockchain analysis, with or without AI, could track the traces of capital flight much more efficiently than traditional methods; one could freeze accounts for a token like USDT or USDC, contact exchanges for all coins, and so on.