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The State Of Cryptocurrency Regulation In African Countries



Cryptocurrency Regulations
Brittney Issa (Flickr)

Cryptocurrencies, alongside blockchain, have proven to be one of the most impressive fintech innovations, as they hold huge promises of restructuring the economy of many countries whilst equally granting escape from the limitations of the global economy.

Crypto operates on a decentralized finance system which is largely based on encryption and validation. This means that the government and the central banks have only a little influence over it. 

While interests in crypto as a form of digital currency have been expanding around the globe, reports on the state of cryptocurrency regulation in Africa, show that only a few African countries have an encouraging stance on crypto. A few have even banned its use, but in most places, this innovation is stuck in a regulatory limbo. In this article, we examine the state of cryptocurrency regulation in African countries with a considerable number of interest.


The Nigerian government had earlier expressed concerns surrounding the appeal of crypto and have attempted to place a ban on it. Over the years, financial regulators have constantly warned Nigerians about the inherent risk of using crypto. 

Notwithstanding these warnings, Nigeria remains the largest crypto community in Africa and has become a popular destination for crypto trading. Given the heightened use of crypto by Nigerians, there is, however, the need to establish regulations guiding its use.

The current legal status of crypto in Nigeria remains uncertain. Nigeria is yet to instigate a legal framework for crypto currencies. There is nonetheless a great interest to formulate one quite shortly. The Nigeria’s Securities and Exchange Commission is currently working to ensure that a framework is being put in place for crypto regulation in Nigeria.

As reported by a local newspaper in the country, the legislative arm of the Nigerian government is currently reviewing a bill on cryptocurrency.

South Africa

Recently, Africans experienced a larger volume of crypto regulations, trade, and ownership, as the fintech sector has consistently thrived in the continent. This is particularly true in South Africa which has become popular for its progressive stance in the crypto and blockchain community, and has even proposed a favorable regulatory framework for crypto and blockchain. 

South Africa recently released a policy paper that outlines 30 recommendations for the regulation of cryptocurrency and other relevant service providers. The policy enables crypto to be accepted for domestic payment purposes and also implemented the anti-money laundering and travel rule. 


In Kenya, the use of crypto has not been specifically banned. Rather, it has been proclaimed ‘unregulated’.

The Central Bank Of Kenya (CBK) has cautioned Kenyans about transacting or investing in crypto. They advised that it could be a Ponzi scheme of some sort, and may result in a risky venture. In consideration of this, the CBK has expressed its reluctance to rush into the regulation of crypto currencies, defining the situation as “open to innovations”. 

However, the Central Bank Of Kenya has declared a policy on the use of crypto, which serves as an indication to improvements in their plans for crypto regulation. 


The Bank of Ghana, just like many other banks in Africa, had previously pronounced crypto as illegal within the country and has warned citizens against crypto trading due to the risks involved. 

Currently, the bodies responsible for financial control in Ghana, have not settled on a regulation for crypto. However, the BOG has made mention of looking into regulations for digital payments in the country.

Their approach towards crypto is also beginning to take a new form with the announcement from the Bank Of Ghana recently that the country may issue it’s own digital currency in the future.


The Reserve Bank of Zimbabwe (RBZ) had also quite been reluctant to make crypto legal in their country, due to the high number of fraudulent activities that comes with it. Also, the Zimbabwe government had earlier banned local banks from processing crypto.

However, the RBZ has seen the need to regulate crypto, as it has become a global trend. In an impressive turnaround from its previous anti-crypto stance, the RBZ has proposed a crypto regulatory sandbox. Currently, Zimbabwe has started formulating a policy framework to guide the business activities of crypto firms. 

Most North African countries have been observed to have demonstrated more opposition concerning the adoption of crypto and blockchain. Countries like Morocco, Algeria and Libya have issued bans against all activities involving cryptocurrencies.

On a concluding note, the digital community is seeing a completely new phase of evolution, and there is the need for every country to regulate crypto. With each passing day, people are showing greater rates of involvement in crypto, and many have continued its use, even without authorization from the government or the presence of any regulatory framework set up for it.


Crypto Assets

Crypto prices drop as global market fear increases



Top cryptocurrency prices have fallen amidst a drop in stocks and fears over China’s Evergrande debt crisis. In the last 24hour, Bitcoin dropped from $47,772 to $42,630 shedding about 8.58%. this is the lowest in price since another bull run began on Sept 5 after the April crash.

El- Salvador’s President, Nayib Bukele sees the fall as an opportunity to invest more. Recall that the country adopted Bitcoin as a legal tender on September 7. Despite the adoption, the price of Bitcoin has fallen by almost 14% since then.

Other coins have experienced dramatic crashes within the last 24hours. Solana, a coin that has experienced 355% growth within the last 3 months fell from $162 to $130 shedding about 11.39% within the last 24hours. Solana’s fall may be categorized by the 17-hour outage which the founder, Anatoly Yakovenko said was caused by bots “flooding the networks”

Ethereum fell by 9.37% while Dogecoin and Axie Infinity fell by 11.22% and 14.14% respectively within the last 24hrs hours. While crypto experiences dark Monday, El-Salvador keeps investing more money in Bitcoin.

A look at the global market

The global market is experiencing fear due to the Evergrande debt crisis. A report published by the University of Michigan shows that consumer’s sentiment is beginning to decline. This trend alone may impact the crypto market as well.

On the other hand, the global market downturn must have been spurred by the Evergrande debt crisis. The company grew to be one of China’s biggest companies by borrowing more than $300bn. Last year, Beijing made rules to control the debt owed by big real estate developers. This led Evergrande to offer its properties at major discounts to raise more money to keep the business afloat. Right now, the company is struggling to meet the interest on payment of debts.

Why would it matter if Evergrande fails?

The collapse of the multi-million dollars company would affect the global market; including the crypto market. Many people bought properties from Evergrande and they expect to make gains. If Evergrande falls, crypto investors will be forced to withdraw more money to keep their business running without the means to invest more. When one business fails, the other gets affected indirectly. This also applies to other firms that do businesses with Evergrande.

The potential impact on China’s financial system is another effect of Evergrande’s fall. In his statement to BBC, Mattie Berkink, the Economist Intelligence Unit (EIU), said that “the financial fallout would be far-reaching. Evergrande reportedly owes money to around 171 domestic banks 121 other financial firms” if the company fails, other lenders or businesses may be forced to lend less. Thereby leading to a credit crunch- a situation where companies struggle to borrow money.


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Bitcoin in Africa

The rise of CBDC in African economies



Many nations have taken cues from the world of crypto and its resounding successes over the last decade. In order to avoid getting left behind, governments worldwide are increasingly turning their attention towards implementing some form of digital currency, a CBDC which in full is Central Bank Digital Currency. Although inspired by cryptocurrencies, CBDC’s are quite different from traditional crypto platforms. The main differences are that CBDC’s are unlikely to be decentralized, the supply of this currency regulated by the host’s country’s central bank as the CBDC is designed to operate as a sovereign legal tender, the digitized form of the host country’s fiat currency. Thus, a central bank may issue digitized tokens of its currency of which their value is pegged to the fiat currency of the nation in question, making CBDC’s stablecoins.

Africa has seen a rise in the use of cryptocurrencies and it’s still pushing frontiers in this sector. Although the use of crypto in many African nations is becoming more and more pervasive by the day, the tone of governments in many of these countries toward the sector is cautious at best and threatening at worst. However, a few nations have voiced interests in creating digitized versions of their legal tender to function as a CBDC. Amongst these are Ghana, Nigeria, Morocco, Kenya and Tunisia.

Many of these projects are still in the research phase or developmental phase however. A good example is Ghana’s proposed CBDC, the E-cedi being developed in partnership with German company, Giesecke + Devrient. Nigeria’s CBDC project, the eNaira has been announced and according to Nigeria’s central bank, this CBDC will be launched sometime in 2021. To that end, the CBN has partnered with fintech company, Bitt Inc. to serve as the technical partner in the eNaira’s development. Reportedly, the CBN had made the decision to digitize the Nigerian Naira in 2017.

While the pursuance of digital currencies in African nations is a welcome development, implementation of these schemes isn’t without challenges. Chief among the issues countries in Africa face would be the already existing financial service inequality and poor penetration of internet access in the continent. These challenges must be tackled in order to allow for mainstream adoption of CBDCs and the subsequent provision of financial inclusion. The benefits largely depend on the peculiarities of the nation deploying them. For instance, a digital currency is thought to help Nigeria increase foreign remittances, it’s second largest source of forex after oil. Whatever the outcome of these projects, it is becoming apparent that CBDC’s have come to stay.

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Decentralize Brief

Bitcoin trades above $51k ahead of El Salvador’s adoption



Bitcoin growth

Bitcoin price has rallied above $51,000 ahead of El Salvador’s adoption. The immediate surge in price may be due to the social media campaign that everyone should buy sats of Bitcoin to support El Salvador’s plan to make the coin a legal tender or it may be due to the news of El Salvador’s adoption of the coin as a legal tender on September 7. Users of social media platforms like Twitter and Reddit are discussing how they will buy Bitcoin of $30 each to mark the new El Salvador Bitcoin law.

The surge in Bitcoin’s price began in the last 24hrs with the price rallying around $51,955 with a 3.37% increase. This is an all-time high after the April crash that brought the price of Bitcoin from $64k down to $28k. The move by El Salvador to be the first country that accepts Bitcoin as a legal tender and the social media campaign that leads to a surge in price ahead September 7 are a repetition of events that occurred late last year and early this year with regards to institutional investors and how the price of Bitcoin skyrocketed.

El Salvador, a country in Central America, has been preparing heavily to adopt Bitcoin by installing ATMs to allow citizens to convert the token into US dollars. Last week, the country’s Legislative Assembly passed a law to allow for the creation of a $150m Trust to support the conversion of Bitcoins to US dollars.

To promote the use of Bitcoin, the government states that it will give the adult population of El Salvador $30 in Bitcoin once they download “Chivo” the wallet issued by the government. This was confirmed by the Finance Minister, Alejandro Zelaya.

What this means for Bitcoin investors

Apart from the adoption by Salvadorians, on-chain analytics show that Bitcoin is in high demand. The fourth halving that occurred will make Bitcoin become a scarce token in the nearest future. Thereby increasing the price sporadically.

With El Salvador’s interest in Bitcoin, other countries are likely to follow suit- Panama is considering following El Salvador’s lead. History will repeat itself as this development will serve as another crypto rout that occurred early this year when Tesla and MicroStrategy announced their support for Bitcoin.

El Salvador’s new law allows the use of Bitcoin as a legal tender it can be used to buy goods, pay for taxes and bank loans. This means more demand for Bitcoin, with the fourth halving that occurred, it means less supply. A common rule of economics for demand and supply will apply. Prices are projected to keep rising. At the time of writing this report, Bitcoin is trading at $51,839 with a projection of $52k before the end of today and higher tomorrow when Salvadorians begin to use the token.

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