Crypto coins
In a little over a decade, the cryptocurrency industry has exploded. It is now estimated to be worth more than $3 trillion. This impetus has been recovered in Africa, which has been widely highlighted as one of the fastest-growing and most promising continents for cryptocurrency adoption. Bitcoin is used in many places, including crypto casinos – you can check the full list here, where you will find that it indicates the widespread of blockchain technology.
According to a survey by an American blockchain analysis company, Africa’s cryptocurrency market grew by 1,200% in the past year, bringing its total crypto assets to USD 105.6 billion. The continent has also witnessed a considerable increase in the ownership and trading of cryptocurrencies in recent years.
In addition to Bitcoin (the most frequently used cryptocurrency worldwide), other cryptocurrencies such as Dash and Lisk are traded in Kenya and other African nations such as South Africa, Botswana, Nigeria, Ghana, and Zimbabwe.
What do recent statistics say about the regulatory framework of Bitcoin in East African countries?
According to statistics from the Absa Africa Financial Markets Index 2021, several African nations have then been considering adopting digital currencies issued by central banks through secure networks (CBDC). CBDC is a primary bank-issued digital currency intended for use as legal money.
As a result, Nigeria became the first African nation to establish a digital currency supported by its central bank with the launch of the eNaira in October 2021, while Ghana continues to collaborate with German firm Giesecke+Devrient (G+D) to pilot the e-Cedi. Kenya, Morocco, Rwanda, and South Africa are evaluating the viability of using digital currencies for retail transactions.
In contrast, Eswatini and Mauritius are assessing the viability of using digital currencies for both retail and wholesale transactions. Unsurprisingly, Africa is the leader in the value of crypto-based remittances due to the prevalence of new fintech technology, such as mobile money payment systems.
Africa has been repeatedly named the most costly location in the world for transferring money. Still, bitcoin platforms such as Bitpesa, LocalBitcoin, and Paxful have lowered transaction fees in remittance prices by more than 90 percent. Like their counterparts throughout the world, Regulators in Africa have been faced with the onerous issue of finding the appropriate instruments to control the dangers posed by the rising usage of cryptocurrencies.
What does the future of crypto in East Africa hold?
With the rising cryptocurrency trade, it is evident that cryptocurrencies cannot continue to operate independently. African nations have implemented regulatory frameworks for cryptocurrencies ranging from total acceptance to utter prohibition.
According to the Law Library of Congress, by the end of 2023, 19 African nations would have placed an implicit ban on cryptocurrencies, prohibiting banks and other financial institutions from dealing in cryptocurrencies or offering services to individuals or businesses providing cryptocurrency services and prohibiting cryptocurrency exchanges from operating in their economies.
Other nations, like Algeria, Egypt, Morocco, and Tunisia, followed China’s recent lead and unilaterally outlawed cryptocurrencies in their economy, making their usage and exchange illegal.
However, it has also been witnessed in other continents that while the governments are not fond of cryptocurrencies, the citizens and their adaptation of the blockchain technology state a different story altogether.
How important is a regulatory framework surrounding Bitcoin in these countries and what will it bring?
In response to several cryptocurrency-related frauds, South Africa has hastened its cryptocurrency rules and has been working on its legal framework for cryptocurrency regulation.
According to Financial Sector Conduct Authority (FSCA) Commissioner Unathi Kamlana, the FSCA considers cryptocurrencies as assets rather than currencies. The cryptocurrency laws proposed by the FSCA will create trading standards, assure investor protection, and manage the relationship between digital currency and the nation’s financial markets.
Given the present situation around the rise of cryptocurrency in East Africa, it all seems tense. Even though some researchers compare Bitcoin and other cryptocurrencies to a Ponzi scheme, many Africans are willing to invest in them.
Experts concur that Africa should enthusiastically embrace the idea. They assert that Africa needs blockchain technology and the resulting cryptocurrencies more than any other region.
However, it is highly suspected that Bitcoin will be the future of payment methods globally in the next 10-15 years.
