“I think it’s fair to say that around the continent, people are being cautious,” said Andrew Nevin, partner and chief economist at PricewaterhouseCoopers Nigeria, on the attitude of regulatory bodies in Africa toward cryptocurrencies.
“There’s been a lot of problems with cryptocurrency and various kinds of fraud: initial coin offerings and projects that didn’t have sufficient value and have gone backwards or folded up. So, I think that the authorities are taking the right view in taking this step by step,” he added.
In a study by Ecobank in August 2018, only Namibia had outrightly claimed cryptocurrency to be illegal. By November 2018, Zambia, Zimbabwe, Morocco, Algeria, and Libya were reported to have joined the mix. Crypto-related transactions are still restricted in Morocco, Zambia, and Egypt. It seems like Egypt is reconsidering its stance, but cryptocurrency transactions are punishable by fines in Morocco, and Algeria has remained firm in its decision to outrightly ban bitcoin usage.
Between 2018 and now, some African countries seem to have warmed up to the use of cryptocurrency. Although Zimbabwe had earlier banned its use, the Reserve Bank of Zimbabwe now seems keen on regulating cryptocurrency in the country.
Kenya’s central bank which earlier compared cryptocurrency to pyramid schemes has set up a task force to study blockchain technology and Nigeria’s Securities and Exchange Commission (SEC) issued regulatory guidelines for cryptocurrencies and crypto-based startups.
The stance against the use of cryptocurrency in most countries may have stemmed from the prevalence of Ponzi schemes in most African countries and lack of awareness. But governments are becoming more enlightened and while they are still wary, they seem more willing to embrace digital money.
Between citizens' growing interest and the increasing demand for cryptocurrencies, Africa’s regulators might have no choice but to play ball; best if it’s sooner rather than later.