Africa is one of the most interesting territories to discuss cryptocurrency and regulation. The continent currently lags behind the rest of the world when it comes to embracing, adopting, implementing and regulating its use. This is due to a conflict between citizens of countries who have recognised its potential and benefits and their governments and banks who have opposed its use and failed to regulate it. Here we will discuss why Africa should embrace crypto, what is currently happening and touch on some more recent developments.
Why African Could Benefit from Cryptocurrency
Africa and cryptocurrency should go together like bacon and maple syrup or millennials and avocados. However, the prospering relationship between the two has yet to come to fruition. Africa currently has one of the largest populations of unbanked people, mostly in Sub-Saharan Africa. Add unstable economies, already volatile currencies and the spread of the internet and you have the perfect cocktail for cryptocurrency adoption. Not to mention that Africa already has a widespread culture of sending money by mobile apps, and it could speed up payments between Africans working elsewhere in the world who send money home to Africa. So, why haven’t more Africans started trading Bitcoin for example with the help of bitcoin wallet providers like Luno?
The answer is a combination of things. On the one hand, many African governments and central banks – but not all – are opposed to cryptocurrency out of fears it will cause financial crimes and make their citizens at risk of scams. Some have even gone as far as denying crypto fans in Africa a bank account. Other reasons for its non-usage are to do with a lack of financial education. If African countries who have yet to regulate cryptocurrency could do just that, the door may open for safe uses and multiple benefits for African citizens. Ultimately, making crypto a success in Africa.
African Case Studies
Africa does not deserve a blanket statement to say that all countries are lagging behind and have not implemented crypto regulations. Some countries are steaming with (planned) regulations ahead such as:
· Mauritius – the island is getting a reputation s a crypto hub thanks to their regulations
· Nigeria – their central bank has planned regulations and the country currently uses crypto successfully
· South Africa – similar to Nigeria, South Africa is working with businesses and experts to come up with regulations. They also provide citizens with financial education surrounding crypto
On the other hand, there are negative responses from some African countries such as:
· Kenya – their central bank actively rejects crypto
· Namibia – they share a hard stance along with Kenya
· Zimbabwe – as a country in economic turmoil, they are trying to protect their fiat currency by denying crypto at this stage
Will Libra Make a Difference?
Latest noises from Facebook also suggest that Africa could become a successful home of crypto. The new Libra currency, which is planned to launch in around one year’s time, has been earmarked as a solution for unbanked people. This means it could have significant use in African territories where people struggle to open a bank account. If governments could begin to plan regulations for Libra, they could harness the success that cryptocurrency affords.
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