Exploring a Global Currency and Financial Evolution: Insights from Farzam Ehsani on Bonnie Blockchain

In a recent interview on Bonnie Blockchain, Farzam Ehsani, CEO of VALR, discussed the future of the global financial system, Bitcoin’s role, and the challenges of transitioning to a unified, borderless economy. With a global perspective from living in Kenya, the U.S., and now South Africa, Ehsani’s insights provide a thoughtful look at how cryptocurrencies could shape our future.

The Need for a Global Currency 

Ehsani opened by addressing the need for a global currency, noting that national currencies are a relatively recent development. Historically, banks issued their own currency, and globalisation and technological advancements, particularly the internet, are pushing the world toward a currency beyond national borders. In a globally connected world, exchanging currencies for international trade or travel is inefficient, akin to having different currencies for each neighbourhood in a city. While the transition to a global currency may take time, Ehsani views it as an inevitable step towards a more unified global economy.

Vested Interests as a Barrier 

One significant barrier, according to Ehsani, is the vested interests of financial intermediaries, such as banks and payment processors, that profit from the current system. While these entities may resist change, Ehsani remains optimistic that progress will prevail, as it has in the past, moving toward a more equitable financial system.

Bitcoin as a Global Currency? 

Ehsani was asked if Bitcoin could become the global currency of the future. While he sees Bitcoin as a strong contender, he believes the next global currency may not be tied to any one nation and will likely be a cryptographic asset, possibly Bitcoin or something yet to be invented. Ehsani emphasised the importance of humility in such predictions, as history shows reserve currencies change over time. While Bitcoin has potential, the future could bring unforeseen developments.

Financial Injustice and Inefficiencies 

Ehsani highlighted the financial injustices in the current system, particularly in Africa’s remittance corridors, where sending money can incur fees as high as 10%. This burden disproportionately affects the poor. Ehsani also questioned the necessity of inflation, which is embedded in many financial systems and often harms the most vulnerable populations. He believes there are better ways to structure economies that do not rely on arbitrary inflation targets.

Challenges of Nation-States 

Reflecting on the outdated concept of nation-states, Ehsani argued that in an interconnected world, the rights and privileges tied to one's place of birth are increasingly irrelevant. The internet enables seamless communication and transactions across borders, making the barriers imposed by national boundaries seem arbitrary. He likened national currencies to a scenario where different neighbourhoods have their own currencies—an inefficient system that no longer aligns with the realities of global interconnectedness.

Toward Global Governance 

Ehsani also discussed governance, drawing parallels to the evolution of currencies. Just as we have moved from tribal units to nation-states, the next logical step is global governance. Although this may seem ambitious, he believes it’s a natural progression. Global institutions could one day protect the rights of all humanity, transcending national systems. While this transition will face resistance and likely crises, Ehsani is optimistic that humanity will eventually achieve a more unified, just, and peaceful global society.

The Inevitability of Change 

Throughout the interview, Ehsani stressed that change is inevitable, pointing out that major societal shifts often occur suddenly and unexpectedly. Whether triggered by financial crises or technological breakthroughs, these shifts lead to profound changes in how society operates. For instance, digital currencies like Bitcoin have the potential to surpass traditional financial systems, much like how digital versions of mail and music have outpaced their physical counterparts.

Bitcoin’s Role: A Tool, Not a Panacea 

Ehsani offered a nuanced view of Bitcoin’s role, cautioning against the narrative that "Bitcoin fixes everything." While Bitcoin can address economic inefficiencies, it’s not a solution to all societal problems, which are multifaceted and include political and social issues. Bitcoin should be seen as a tool that, while powerful, must be used alongside other efforts to improve the world.

The Injustice of Capital Controls 

Another issue Ehsani touched on was Bitcoin premiums in regions with capital controls, such as South Africa and South Korea. In South Africa, exchange control regulations make it difficult for individuals to move capital freely, resulting in Bitcoin often trading at a higher price domestically than in global markets. These inefficiencies underscore the need for a more open financial system, which cryptocurrency could help enable. VALR once offered a product to exploit these inefficiencies, though it was discontinued due to regulatory concerns.

VALR’s Global Expansion 

As the largest crypto exchange in South Africa, VALR faces challenges and opportunities as it expands globally, with a focus on Asia and Europe. Ehsani emphasised the importance of trust and integrity in the crypto industry, especially after the collapse of platforms like FTX. He highlighted VALR’s efforts to maintain transparency and uphold high standards.

In terms of product offerings, VALR continues to innovate, recently launching USDT and Rand-denominated perpetual futures and enhancing cross-margin trading features. While the company’s roots are in Africa, Ehsani sees VALR playing a larger role on the global stage.

Conclusion 

Farzam Ehsani’s interview with Bonnie Blockchain provided a compelling look into the future of finance, governance, and cryptocurrencies. His vision of a global currency free from national ties, coupled with insights into financial injustices and VALR's growth, reflects his commitment to creating a more equitable world. As VALR expands its offerings, it’s clear that the company’s ambitions are as global as its CEO’s vision, positioning it to play a significant role in shaping the future of finance.

Risk Disclosure

Trading or investing in crypto assets is risky and may result in the loss of capital as the value may fluctuate.

VALR (Pty) Ltd is a licensed financial services provider (FSP #53308).

Disclaimer: Views expressed in this article are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.