As many as 70,000 people could be facing financial ruin as a massive crackdown sweeps across Ghana’s banking system. It serves as yet another stark warning that governments and banks are in full control of people’s money. Only decentralized assets such as bitcoin would be immune from such monetary madness.
State ‘Cleanup’ Wipes Out Billions
According to reports a massive ‘cleanup’ of Ghana’s banking system has left tens of thousands of people wondering where their savings have gone. The crackdown has reduced the number of lenders by a third, and resulted in the closure of 23 savings and loans firms. It also triggered a run on fund managers which caused a selling spree and mass liquidation of holdings.
An estimated $1.6 billion has been wiped out, which is over a third of the assets that private fund managers supervise for retail and institutional investors. Ghana’s primary financial regulator, the Securities and Exchange Commission, has increased pressure on at least 20 fund managers it suspects of violating the rules.
The SEC has blocked asset managers from receiving any new investments as they may be used to pay out existing investors. The massive run on holdings has left as many as 70,000 people desperately seeking answers as to where their savings have gone. Lord Mensah, a senior finance lecturer at the University of Ghana, commented;
It’s cutting across all the finance houses and when it happens like that the government needs to step in to build confidence again. There’s nothing we can do apart from making sure that we create that necessary environment to regain investors’ confidence again.
The likelihood of the government bailing out burnt investors is slim as the central bank targeted the savings companies servicing them. Many are already blaming the government for not having adequate provisions to prevent such financial fiascos. Financial Crime and Governance and Regulatory Expert, Kwadwo Kusi-Frimpong, wrote;
The issue Ghana faces is more about having adequate system and controls in place to ensure that there is no room for such things to happen.
Bitcoin is The Solution
Crypto industry observer ‘Rhythm Trader’ said that financial management should not need a middleman and bitcoin, with its ever expanding network, is the answer.
The savings of tens of thousands wiped-out overnight.
This is why saving your wealth should be simple and not need a middleman.
Bitcoin fixes this.
A banking crisis in Ghana means $1.6 billion of savings is now possibly gone for 70,000 investors.
The savings of tens of thousands wiped-out over night.
This is why saving your wealth should be simple and not need a middleman.
Bitcoin fixes this.
— Rhythm (@Rhythmtrader) August 19, 2019
Many would argue that bitcoin’s volatility is keeping the masses at bay, coupled with the fact that it is a high risk investment. But for thousands of Ghanaians, what they perceived to be traditional investments have proved to be a much higher hazard.
Can bitcoin solve the savings crisis? Add your comments below.
Images via Shutterstock, Twitter @Rhythmtrader
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