Mamadou Mbaye

Correspondence: Mamadou Mbaye, m.mbaye@univ-thies.sn

Department of Economics Faculty of Economic and Social Sciences Iba Der Thiam University of Thiès, Senegal.

pdf (417.74 Kb) | doi: https://doi.org/10.47260/bae/1324

Abstract

Blockchain adoption in Africa raises critical concerns about energy sustainability and systemic financial risks. In West Africa, digital finance is promoted as a driver of monetary inclusion and sovereignty, yet Proof of Work (PoW) blockchain validation imposes unsustainable energy costs with direct implications for transaction efficiency, monetary stability, and systemic resilience. This study applies an economic modeling framework inspired by the Cambridge Bitcoin Electricity Consumption Index (CBECI, 2024), integrating regional data on electricity pricing (Senelec, 2025), monetary aggregates (BCEAO, 2023), and blockchain activity (Chainalysis, 2023). Results show that converting 5% of Senegal’s M1 into PoW validated cryptocurrency transactions would require 144% of national electricity demand, confirming incompatibility with financial stability. Comparative analysis of Nigeria, South Africa, Kenya, and Ghana highlights heterogeneous vulnerabilities but a shared unsustainability of PoW. Policy implications emphasize coordinated regulation, technological innovation, and energy governance. Proof of Stake (PoS), reducing energy use by 99.95%, emerges as a credible pathway for sustainable blockchain integration in emerging economies.

Keywords:

  Blockchain, cryptocurrency, Energy consumption, Sustainability.

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