Statistically, Africa is the region with the highest young people demographic, and this is an underlying factor in the surging crypto interest in Africa.
Whilst some have welcomed this financial globalization with open arms, others are sceptical, passive, and indifferent about this. And of course, some other countries have kept their doors shut. This has led to a disparity in adoption rates and attitudes towards cryptocurrency.
This is where we come to take a look at the extent to which cryptocurrency has been embraced or rather adopted in different African countries.
What are Cryptocurrency Regulations?
You can see these are the legal systems and structures set in place by the government of a country to oversee the trade and general use of digital assets. These rules can either support the utilization of digital assets and currencies, or it can ban them outright.
Why Regulate Cryptocurrency?
The crypto market, as a volatile one, is famous for unprecedented fluctuations in price. The value of a cryptocurrency can swing wildly in a matter of days, hours, or weeks as well, and this makes it a very risky game to venture into.
It also increases the chances of scams and fraudulent activities that could be perpetrated in it. These and more are reasons why different governments curtail or rather oversee the use of this digital currency in their economy.
The Comparison
As we have mentioned, African countries have responded differently to this new wave, and we’ll be leading you to explore the paths some of these countries have taken in adopting cryptocurrency.
Crypto Regulations in Nigeria
Nigeria is recorded to have the largest cryptocurrency economy in Sub-Saharan Africa such that globally, crypto transactions grow year after year.
Also, 47% of Nigerians in a survey reportedly use cryptocurrencies, and based on another report by Triple A, 10.34% of Nigerians own cryptocurrency, or about 22 million people.
Currently, the Nigerian government has licensed the first crypto service providers in the region.
Cryptocurrency Regulation in Egypt
Under Islamic Law and by religious decree, cryptocurrencies in Egypt are prohibited.
“It should be noted that the declaration of cryptocurrencies being haram is fatwā, meaning that while the religious decree is a legal opinion, it is non-binding.”
In 2019, the CBE — Central Bank of Egypt announced it was working on a law that would ban the creation, trading, or promotion of cryptocurrency without a license.
In 2020, the bank subsequently added Law No. 194, which prohibits “issuing, trading, or promoting cryptocurrency,” as well as creating or operating “trading platforms” and “carrying out any related activities.”
Egypt remarkably ranked 14th among the global top 30 countries that adopted crypto in the 2022 Chainalysis Cryptocurrency Adoption Index.
Cryptocurrency Regulation in Botswana
Since the Virtual Assets Act came into effect on 22 February 2022, NBFIRA — Botswana Non-Bank Financial Institutions Regulatory Authority has intensified measures against unregistered crypto dealers in Botswana
Botswana’s Virtual Assets Act specifies penalties to be levied against unlicenced operators, which include fines of up to P250 000 or imprisonment for a term not exceeding five years or both.
Cryptocurrency Regulation in Tanzania
The Director of National Payment Systems of the Bank of Tanzania confirmed that cryptocurrencies are “not recognized in the country and whoever uses it will not get any assistance from (the Bank of Tanzania) should anything happen.”
However, the government here didn’t ban the use of cryptocurrency by the private sector, but they didn’t fail to stress that the Tanzanian shilling is the only acceptable legal tender.
Cryptocurrency Regulation in Kenya
Finance and National Planning Committee of Kenya’s National Assembly approved the Capital Markets (Amendment) Bill, 2023, (CMAB) on 5 December 2023.
The bill seeks to tax crypto trading; promote transparency in the crypto market, and improve regulatory oversight; as well as help curb crime and terrorism financing.
The CMAB introduces taxes on crypto assets kept on exchanges and in digital wallets. Kenyans engaged in crypto transactions, such as trading and payments, will be required to pay capital gains taxes; and banks will deduct 20% excise duty on associated fees and commissions.
Kenyans who own or deal in digital currencies will be obliged to disclose all such holdings to the Kenya Revenue Authority. The bill also places all digital currencies and blockchain under the oversight of the country’s Capital Markets Authority.
Kenya is the largest cryptocurrency market in East Africa, where about 8.5% of its population own cryptocurrencies, according to a 2022 United Nations Conference on Trade and Development report.
Cryptocurrency Regulation in Morocco
Despite the nationwide ban on the trading and possession of cryptocurrency, there has been a progressive cryptocurrency growth between 2021 and 2022.
The Central Bank of Morocco (BAM) announced that it is willing “not to limit innovation and protect citizens from the various risks associated with the field”.
In 2023, the Governor of Morocco’s Central Bank, Bank Al-Maghrib (BAM), Abdellatif Jouahiri, announced a series of discussions between the BAM and the market participants after finalizing the “Crypto Regulatory Framework”.
These participants include regulators, such as the Moroccan Capital Markets Authority (AMMC), the Insurance Supervisory Authority, and Social Security (ACAPS).
Up until now, the country has been adopting a ‘wait and see’ approach when it comes to cryptocurrency.
What You Should Know:
Despite all these diverse regulations, there is a steady growth in the use of cryptocurrency in Africa.
These regulators also accept that there are great opportunities lying in the world of Blockchain and cryptocurrency, so even as the regulatory landscape is varying differently now, one thing is certain, it would reshape Africa’s financial sector.
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