There was an awakening jolt when the Ghanian Cedi sunk to its lowest in October 2022. Many watched with dismay as prices of goods and products skyrocketed, dragging with it our hard-earned funds. With the Ghanaian Cedi hitting new lows, it didn’t come as a shock when many Ghanaians began to seek alternatives – Crypto being the prime choice for many.
Cryptocurrencies like bitcoin and USDT came into existence over a decade ago and, in that time, have revolutionised the financial ecosystem. With speedier and seamless transaction that is available to the unbanked and underbanked, it’s no surprise that crypto adoption is massive in Ghana and across the world.
The Current state of the economy: GHS Inflation
The Ghanaian Cedi is constantly depreciating and has fallen 35.7% to the United States dollar in the last few months putting a financial strain on Ghanaians. In October, the Ghanaian Cedi GH devalued at GHS 14 to $1. While the country grieved the currency’s devaluation, the surging fuel prices and inflated cost of products was another crisis Ghanaians had to contend with. With high fuel prices came increased transport fares, surging utility costs, and housing rent making it harder to make ends meet.
It’s no surprise that since rapid devaluation started, there have been protests to the government pleading for a resolution to the pressures of inflation on citizens. It’s hard to live within your means and even more of a challenge to set aside funds for savings, not to talk of retirement. At the rate of inflation, more Ghanaians are getting into debt, and retirement sounds like a dream that is not feasible. In fact, GHS has attained status as one of the worst-performing currencies in 2022.
How USDT Protects Ghanaians From Inflation
While the government is yet to adopt or regulate cryptocurrencies, Ghanaians have rushed to cryptocurrency, which they consider a safe haven. While cryptocurrencies are considered volatile because of their price fluctuations, stablecoins like USDT (tether) have proved a solace to inflation. USDT, a stablecoin, is a digital currency pegged to the US dollar allowing its price stability. Therefore 1 USDT equals $1.
While inflation polarises the world, the US dollar proves to be a stronger currency that allows Ghanaians to retain the value of their money hence Ghanaians’ continuous adoption of USDT as a hedge against inflation. Here’s how Ghanaians have come to use USDT to protect against inflation.
Following the most recent plunge of the Ghanaian cedi, GHS has depreciated by more than 55% in 2022. This means the value of the currency has decreased, and you can no longer buy the same items for the same price. For instance, Indomie Super Pack was GHS 2.50 in 2020 but is now GHS 5 in retail shops.
This means that if you even have enough to set aside in this raging inflation, your savings would be next to nothing in the next couple of years. On the contrary, saving in USDT offers you a more sustainable saving plan. If you save your funds in USDT a couple of years back, your money will not only have retained in value but surged because of the price decrease.
With the GHS devaluation, it’s become clearer that it’s not the best alternative for saving. This is why Africans have begun to set aside their retirement savings in USDT. With the GHS prone to devaluation and rising inflation, USDT offers a solid alternative to retain the value of your money with an added bonus, profit. Following the devaluation, many Ghanaians who previously held money in USDT have sold their funds for a profit. This way, regardless of inflation, you earn profit from the asset appreciation of USDT that covers the cost of inflation while still boosting your earnings.
You might be wondering why you couldn’t just save your money in US dollars instead. The answer is simple, accessibility. The US dollar isn’t easily accessible to many. It’s a hassle to buy or sell US dollars from the abokis in the Central Business District of Accra. Not only are the abokis hardly fair with exchange rates, but you also can’t constantly carry huge sums of cash around with the high crime rate. In fact, a recent report notes that there is an acute shortage of US dollars among banks and bureaux de change.
USDT is easily accessible, and with an internet-connected device, you can easily buy and store USDT in a trusted crypto exchange like Yellow Card from the comfort of your home.
In fact, Ghanaians have discovered other use cases of USDT and use them for cross-border payment. That is, sending USDT to family overseas for international school fees payment and also to conduct international business.
USDT, Unravelling the Limitations of The Finacial ecosystem
There’s no doubt that USDT offers a sustainable solution to the GHS devaluation and the inflation crisis. While the government needs to find a permanent solution to the GHS devaluation, USDT has allowed Ghanaians to take control of their finances.
However, with the mass adoption in Ghana, fraudsters have begun to take advantage of citizens with crypto scams. This is why Yellow Card, a pan-African crypto exchange whose mission is financial inclusion, has provided a secure platform for Ghanaians to easily access USDT. You can buy USDT at the best rates while being assured of the security of your assets.
Additionally, Yellow Card also has the Yellow Card Academy, a free, easy-to-learn guide where you can learn more about crypto and other financial literacy topics to help you attain financial independence.
In a nutshell, USDT has provided a sustainable way for Ghanaians to rise above the GHS devaluation and inflation while earning from its asset appreciation. It’s never too late to take control of your finances and achieve a dream of financial independence.