African countries have always been acquainted with the brisk implementation of digital solutions and technologies. From the use of mobile phones to e-payment platforms, they have always been up-to-date. However, the extent to which blockchain and cryptocurrency have been embraced in African countries is varied.
While several African countries are taking full advantage of the cryptocurrency space, there are also countries whose governments remain unreceptive. There is the issue of regulation, the need for it, and the lack of proper crypto infrastructure that will enable fast-paced access.
Studies have shown that the main pioneers of cryptocurrency in Africa are countries such as Botswana, Ghana, Kenya, and Nigeria. This article will outline the latest developments taking place in the above-mentioned African countries, and what it means for their future in cryptocurrency.
Primitively, the adoption of cryptocurrency in Botswana was welcomed with indifference and a lack of official stance. This indifference was followed by a decision by the Bank of Botswana (the central bank of Botswana), to not regulate cryptocurrencies. Meetings conducted by firms in the country with the government officials to discuss the potential use of blockchain technology showed that the officials were skeptical about what advantage lies in their adoption of the technology.
Despite the lack of regulation, there was the development of several blockchain start-ups in Botswana:
- Kgoboko: This start-up was founded to attend to the needs of those who do not have access to the services of banks or financial organizations.
- The SatoshiCentre and Plaas: This was established by Alakalani Itireleng in 2014. The SatoshiCentre was initiated to create awareness and spread the word about Bitcoin across Botswana and Africa. Since its inception, it has successfully introduced bitcoin to entrepreneurs across the country thereby creating room for a community of individuals who are interested in blockchain technology. Plaas is a start-up launched under SatoshiCentre to enable farmers to manage their daily productions on the blockchain spectrum.
On the future of crypto in Botswana, the founder of SatoshiCentre simply said she wants to build and keep educating people about the bitcoin ecosystem without wavering. In her words, compared to 2013, a lot of people are now involved in bitcoin, and this means Bitcoin’s future in Botswana is hopeful.
On the 22nd of January, 2018, the Bank of Ghana released a statement stating that the use of digital currencies is not licensed under the payments system acts and as such, the public is to do business with only licensed institutions to ensure that such transactions fall under the country’s regulatory scope.
Since then, the Bank of Ghana drafted a Payments Systems and Services Bill that they believed would enable the regulation of cryptocurrency in the future. However, the use of cryptocurrencies is still being discouraged because of the perceived risks that come with them and how individuals have lost money to crypto-related transactions.
The Deputy Director-General of the Security and Exchanges Commission SEC, Paul Ababio, in an interview, said that Ghanaians should desist from blockchain technology. He eventually added that a framework for the regulation is being devised and that a final decision will be passed across.
This does not change the fact that Ghana is one of the top African countries with high cryptocurrency trading volumes.
The enactment of cryptocurrency in Kenya, like many other African countries, was met with indifference by the government. In the case of Kenya, its central bank was worried about the degree of uncertainty in the future price, as well as the unpredictability of the technology.
Over time, the estimated number of bitcoin transactions in Kenya grew to over $1.5m as business owners began making use of the technology to accept payments. The business owners stated that they enjoyed the convenience and how it has helped to reduce the cost of transactions.
Kenya’s Land Commission welcomed the technology with open arms, with hopes that it would help put an end to the fraudulent acts involved in the purchase of lands. The Blockchain Association of Kenya is working to educate individuals on the benefits of using bitcoin and cryptocurrencies.
On the issue of regulation, Kenyans believe that the regulation of digital currencies by the Central Bank of Kenya will speed up the adoption of cryptocurrencies, but this has been slowed down by endless discourse. Methods have been suggested as to how the sector can be regulated to ensure benefits to the individuals and the government.
A task force was set up in April by the Kenyan government to enable a better understanding of why blockchain technology should be regulated.
In 2017, the Central Bank of Nigeria warned institutions and individuals to desist from crypto-related trades as they are not the legal tender in Nigeria. They went further to state that whosoever gets involved in it does so at their own risk. The Nigerian government had major concerns that the rise of blockchain technology would bring about fraudulent activities.
Despite these warnings, Nigeria went on to have the world’s third-largest bitcoin holdings as a percentage of gross domestic product.
Fast forward to the 5th of February, 2021, the Central Bank of Nigeria issued a statement that saw the termination of all crypto-related activities. Financial Institutions were ordered to close the accounts of any individual that has conducted cryptocurrency transactions.
However, the ban was unsuccessful in eradicating blockchain technology in Nigeria, instead, it made room for peer-to-peer exchange (p2p). Research shows that the trading volume in Nigeria has grown significantly despite the ban. In May, Nigeria received $2.4 billion worth of crypto.
Conclusively, it is quite evident that Africa will, someday, spearhead blockchain technology and the adoption of cryptocurrencies. The ability to thrive in spite of bans, lack of regulations, and a dearth of infrastructure is a crucial pointer as to the wealth of opportunities that exist on the continent.
Image Credit: Kabiru Yusuf