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Evaluation of African Cryptocurrencies and Banks

Evaluation of African Cryptocurrencies and Banks

It is now the right time for Africa to adopt the use of blockchain technology and Bitcoin. Currently, the population in the continent is in a good position to adopt the innovative technologies. This is as an alternative to the outdated or expensive banking system found across Africa.  Many Africans still remain unbaked. This is due to the shortage of economic infrastructure together with a shortage of financial education. But the penetration of smartphones in many countries has offered access to alternative financial services. This has changed to the most used means of payment more so among the youthful population.

Bitcoin is attracting much attention from different corners due to its inclusivity and accessibility. But the lack of trust on the online payment platforms by Africans still makes it hard for cryptocurrency to penetrate through the continent smoothly. The first ever multinational cryptocurrency called Nuru Coin was launched by the pan-African crypto community in February this year. Many people have hope that it will offer financial services to those who get it hard to access traditional bank accounts. However, for it to be highly adopted it needs education on the benefits that come with the technology.

The continent has been going through tech-revolution at a higher speed since the end of last year. There has been a mixed attitude and approach towards the growing crypto markets by the African governments. But the fact still remains that decentralization and cryptocurrency are in a position to change people’s way of life for better. African regulation of cryptocurrency was evaluated in three different parts in relation to the increasing fintech industry in the whole world. The first part looked at activities in Asian hotspots like Taiwan, Singapore, Japan and Hong Kong. Furthermore, it looks at how different governments are hindering or facilitating the growth. The second part looks at cryptocurrency regulations and the attitude possessed by various European leaders. The third part checks at the different attitudes of western leaders especially on the disruptive modern technology. It also checks on the way regulatory agencies are preparing for adoption of cryptocurrency in America.

Below is a list carried out through intensive research on the news but we can say that it is not a complete script. One can have other information on the crypto relationship or banks in their countries which we failed to include. In case you are the one feel free to share it out in our comment section, we will be glad.

South Africa

The country launched Project UBU in late last year. This is the first governmental cryptocurrency company which works on issuing global basic income to less fortunate locals. Cryptocurrencies and Blockchain are well known in the country. Financial institutions in the land are progressively moving towards involving it in the sector. Johannesburg has been hosting the Blockchain Africa Conference since its launch back in 2015. The body collaborated with Microsoft and IBM which have remained the leading players to technological changes in Africa over the last century.  The South African Reserve Bank launched Financial Technology program that majors in analyzing fintech development and then the government on the required regulations. It also developed a blockchain project found on distributed ledger technology in Ethereum and will use interbank payments as its experimental product. The South African government has failed to bitcoin as a legal tender since there are no clear rules and regulations in place for the use of virtual currency. But the South African Revenue Service rates cryptocurrencies as intangible products that adhere to the daily tax rules of the land.

Kenya

The Central Bank of Kenya (CBK) warned banks of April this year asking them not to carry out any crypto related crypto entities and transactions. Furthermore, it graded bitcoin to be a huge scam. However cypto investors in the land have not received the clear regulatory guidelines on crypto.  The governor of CBK showed supported the blockchain technology which Kenyan banks have remained skeptic on all the way from 2015. Finterra launched a firm in Kenya due to high interest towards blockchain. The world current blockchain startup did that after President Uhuru Kenyatta urged Kenyans to fully explore blockchains potential ability. He even called for the formation of the technology’s tax force which came to pass in March this year. A number of technology lovers are hoping that the technology will be used to strengthen the mobile money services and land registry. M-Pesa a mobile payment service in the land is serving 30 million hence posing a challenge to the traditional methods of banking. But it denied Bitcoin services to trading platform due to uncertainties in regulations in the country.

Nigeria

In August 2017 the Central Bank of Nigeria announced its first commissioned study on virtual currencies. This aimed at bringing together stakeholders to study and share ideas which proved that Nigeria is an African leader in the regulation of Bitcoin and blockchain in the continent. Latter on Blockchain Nigeria User Group together with Blockchain Education Network of Nigeria hosted the first blockchain conference in Nigeria. many industry leaders and ten startups were present in that conference and talked about incentives to ensure that blockchain startups are found in the country. Techpoint scheduled will also host another conference in later this month that is expected to host more than 5,000 people. However active tech lovers have not received a regulatory response from the Nigerian government. But there is hope for a better future. Nigerian National Assembly passed a bill named “Need to Regulate Blockchain Applications and Internet Technology, in April this year. They also asked the Nigerian central bank to help in coming up with the regulatory framework for fintech.

Egypt

A locally based Bitcoin follower compared the Egyptian use of cryptocurrency to the use of narcotic drug. This took place at the beginning of 2017 where he claimed that his friend was jailed without trial, for using localbitcoins.com. Reports came out in the country that the first ever Bitcoin exchange had been put up in the country in mid last year. The Egyptian central bank came out and emphasized on the legality of the cryptocurrency and denied the authorization of any exchange in the country. Egyptian laws stipulate well the legality of cryptocurrency stating that transaction with cross-border businesses is reduced to specifically official banks. Additionally, it banned electronic mode of banking. Islamic cleric recently announced that virtual currencies are legal. But there is still confused when it comes to the use of digital currency in relation to Sharia law.

 Uganda

Investors in Uganda were warned by the Bank of Uganda about the risk of associating with cryptocurrency back in March 2017. But this has not prevented global investors from putting up exchanges in Uganda. They have also gone ahead to find ways of improving the county’s economy. According to recently released reports, the country’s government is having interest towards blockchain technology. They aim to use the tech to offer basic public services and to rank the country higher in the world marketplace that is highly influenced by tech innovations. AfricanBlockchain.org is planning to host a conference on June this year. It will give leaders a chance to discuss better plans to incorporate blockchain into the country’s economy. Crypto Savannah collaborated with Binance back in April in order to support the county’s economic growth.  Uganda is ranked as one of the poorest countries globally with a Gross Domestic Product of $2,000 per capita. Additionally, 77% of its population is unbanked.

Rwanda

Rwandan capital Kigali hosted the Transform Africa Summit that was attended by more than 4,000 delegates comprising of venture capitalists, investment banks, government regulators, blockchain experts, fintech startups, and head of states. the summit that operated under the theme “Accelerating Africa’s Single Digital Market,” took place from 7th to 10th May this year. The conference brought together representatives of private and public sector showing the effort put in place by leaders to ensure that the continent is at par with the rest of the world in the digital revolution. Earlier in 2018, the National Bank of Rwanda gave out a detailed report on its stand on cryptocurrency and the risk that might come with its market in relation to already existing financial institutions. It stated that it’s preparing for adoption of cryptocurrency which will comprise of developing and regulation of currencies owned by the bank.

Tanzania

Many people noticed the growth of bitcoin in the country when the trading volume of exchange, LocalBitcoin went high. The high use of Bitcoin in Tanzania shows that cryptocurrency is expanding from the crypto guru in Africa, for example, Nigeria to other domant players. The Central bank of Tanzania likened the high growth of Bitcoin in the country to speculation in the market. It went ahead and warned investors who are currently buying and selling in the highly volatile market. Bitcoin caught the attention of the bank back in December 2017 and it has been tracking it carefully so as to develop viable regulation in the coming years. But the cryptocurrency has not been banned officially by the government of the land. The crypto lovers are looking forward to having regulations from the bank and various regional regulators.

Zimbabwe

The Reserve Bank of Zimbabwe denounced the fact that Bitcoin is seen as a legal currency at the end of 2017. This came at the time when there were high political temperatures in the country. The bank said that it was carrying out research and coming up with possible regulations for crypto markets. However, Bitcoin’s future is still not predictable. During the time of the announcement, the value of Bitcoin went up by 10% on Golix which is the largest cryptocurrency exchange in Zimbabwe. It is believed that the exchange put up Bitcoin ATMs in Harare and loaded them using US dollars in April. The country has the worst history of inflation globally. Furthermore, it recently did away with its national currency for a multi-currency system that mostly depends on the US dollar.

Botswana

Botswana is one of the African countries where Bitcoin exchange has not reached. However, it has a small though active blockchain and cryptocurrency community. The country has developed an interest in blockchain and has hosted the first ever Bitcoin and Blockchain Summit in 2016. Botswana by now has three blockchain companies and all of them targets the unbanked population. the Bank of Botswana has not come out to give market regulations and it claimed back in 2017 that it had no interest in studying cryptocurrency as a whole.

Algeria

At the end of last year, the Algerian National People’s Congress passed a bill that declared Bitcoin ownership and usage as illegal in case it will be signed into law. The bill also addresses the ability of cryptocurrency being used for illegal activities for instance tax evasion and trafficking.

Sierra Leone

Media used to circulate information that the country used blockchain tech in tallying of votes in its last presidential election. But this was denied by the National Electoral Commission as mere allegations. It said Agora a voting tech startup was what the country used in its voting process. The company also said that it played a role of election observer.

Ethiopia

Cryptocurrency Company Cardano in partnership with the Ethiopian Ministry of Science and Technology signed an MOU in May 2018. The MOU aims at guiding blockchain training and development for the agritech industry in Ethiopia. The collaboration is mainly meant for the shipment of coffee which is the largest export in the country.

Ghana

Bill and Melinda Gates Foundation gave out grand for research to Bitsoko a blockchain startup found in Ghana in 2015. It was aimed at promoting mobile money acceptance for daily use and offering an efficient and cheap cross-border mode of payment. But the banks in the country have come out to restrict the use of cryptocurrency because of its use in illegal activities. Ghanaian central bank denounced Bitcoin as an illegal currency but showed its interest in blockchain technology to promote settlement and payment systems.

Morocco

Moroccan central bank together with Foreign Exchange Authority banned the cryptocurrency transactions in the late last year. Therefore receiving and sending payments is an offense that comes with a fine. According to the Foreign Exchange Authority, all foreign payments must go through the central bank and authorized intermediaries.

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Written by Denis Opudo

Am an engineer who's a tech blogger, hit me up on dennis@techinafrica.com and we base our discussion on technology in Africa and the rest of the world.
Denis the Tech guru

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