Africa appears to be the perfect setting for adopting and embracing cryptocurrency. Sub Saharan Africa is only second to the Middle East when it comes to adults who do not own a bank account and thus have had to rely on methods of payment outside the orthodox banking world. Their general acceptance of alternative technology to send and receive money puts them in good stead to welcome cryptocurrency and blockchain technology. So, how do some different African countries regulate cryptocurrency? Should residents be looking to sign up for a Luno bitcoin wallet or is your African territory rejecting cryptocurrency at present? Here are the details.
Cryptocurrency Regulations in African Countries
How Africa is dealing with cryptocurrency differs largely by territory. Few African countries have embraced cryptocurrency and blockchain technology with open arms even fewer have amended taxation rulings. Many have rejected its use out of fears of heightened criminal activity, and some governments are playing the waiting game.
Crypto in Kenya
The Central Bank of Kenya is one of many African establishments to dismiss cryptocurrencies and this is in the most part due to its unregulated nature. Nevertheless, blockchain technology is in use throughout the country and the Kenyan Government is exploring initiatives to utilize cryptocurrency and blockchains. However, just because Kenya is yet to fully embrace cryptocurrency and the country does not have specific regulations in place, locals are still interested in it and cryptocurrency in Kenya continues to grow in popularity.
Nigerians are reported to have a significant interest in cryptocurrency and especially bitcoin. Therefore, it is surprising that the Central Bank of Nigeria is yet to implement regulations regarding cryptocurrency. The bank has stated in the past that they are not in favor of digital currencies because they feel it puts the financial security of Nigerians at risk and increases their likelihood of becoming scammed. Yet, unlike the Central Bank of Kenya which are at a stalemate in terms of regulating cryptocurrencies, the Nigerian Bank is preparing to publish a white paper. This publication may be a monumental step in cryptocurrency regulation in Nigeria.
South Africa and Cryptocurrency
South Africa is another country on the continent that has yet to establish cryptocurrency regulations. However, South Africa breaks the mold to Kenya, Nigeria, and many other African examples. This is because South Africa has pledged allegiance to cryptocurrency and is ready to embrace digital currencies. Local regulators are in close contact with fintech companies and banks, together searching for the best way forward. This is best seen in a mass collaboration between relevant parties known as IFWG. Together their aim is to produce a policy proposal for cryptocurrency regulation in South Africa.
Even though Africa may be an ideal location for cryptocurrency to flourish, there is still work to be done and regulation appears to be missing on most occasions. Mauritius is arguably leading the way when it comes to welcoming digital currency. They have a growing reputation as the hub for African cryptocurrency and do have regulations in place. More African countries should turn their attention to their model and see the benefits that it can bring when embraced in the right manner.