Africa's quiet cryptocurrency revolution

• Africa is one of the most dynamic and exciting crypto markets and one of the fastest growing
• Africa is among top 3 regions in terms of crypto market growth after South East Asia and Latin
America.
• Africa has “a bigger share of its overall transaction volume made up of retail-sized transfers than
any other region at just over 7%, versus the global average of 5.5%.”
• While Africa with 54 country has accounts for the smallest crypto economy of any region globally,
the continent happens to have some of the highest grassroots adoption in the world led by:
• Kenya
• Nigeria
• South Africa
• Zimbabwe
• Ghana
African Crypto currency
regulation Map
Africa's quiet cryptocurrency revolution

• Cryptocurrency transactions in Africa are growing rapidly. On a continent that already

embraces mobile money, virtual currency offers advantages for a young and tech-savvy
which is 19% of total population.
• Many African countries suffer from severe currency devaluation and instability, which
makes it difficult for residents’ savings to hold their value for example the South African
Rand (ZAR), has against the U.S. dollar in the last decade and is consistently one of the
most volatile fiat currencies. Nigeria, Egypt, Algeria, Ethiopia, and Ghana face similar
issues with their own currencies.
• Cryptocurrency can act as a more stable value store for people living under these
conditions.
Economy Impact Of Cryptocurrency In Africa

• Africans received $105.6 billion worth of cryptocurrency payments—an increase of 1200 percent
from the year before between July-2020 and june2021 according to chain lysis.
• Expansion and growth of business for entrepreneurs: payments and transaction are done in
various currencies when cryptocurrency is involved. Because of this, African Business owners are
engaged in transactions with American, European and Asian companies with the assistance of a
company called bitpesa.
• Cheap transaction fee: the cost for transaction is low which encourages more participates and
overseas are using P2P platforms to send funds back to their home countries in Africa without
having to pay huge amounts of money in commissions
• Great advantage for unbanked adult in Africa.
• Cryptocurrency creates employment through mining .
Using this metric, Africa has topped peer-to-peer (P2P) payment platforms in terms of
transaction volume across all regions.
Africa is left in a situation where P2P platforms are the only viable solution – unless they use
VPNs to access servers in other countries.
Transaction Volume share by Transfer size
The cryptocurrency opportunity for African digital financial
services

Examples:
• a Mozambique fintech start-up, exudes the spirit of this new movement—the democratization of
finance—by crowdsourcing funding to
finance residential real estate development through cryptocurrency. As such, it demonstrates
decentralized finance’s proof of concept in Africa, circumventing traditional .

• Pezesha, a Kenyan fintech focused on MSME credit scoring and loan origination, unlocked new capital
by converting the cryptocurrency community into MSME lenders in East Africa, introducing a global
pool of lenders to invest directly in Kenyan enterprises. MSMEs and investors. As of this writing,
Pezesha has facilitated over 3,751 loans in Kenya and 344 in Ghana.
Case for regulating crypto assets transactions in Africa

• Money laundering
• Investor protection
• Financial stability
• Tax evasion
• Monetary policy implications
 The crypto assets Regulations in Africa
• Current Status- May 2022
• It is also worth noting that crypto scams are also fairly common in Africa. Some of the most
damaging crypto scams have been AFRI crypt and Mirror Trading International.
• some African countries, there is no regulation governing crypto transactions. These include nations like
Kenya and Ghana. These two countries have recorded a major surge in crypto transactions over the past
couple of years.
• At the other end of the spectrum, South Africa continues to develop and refine its cryptocurrency
regulations. In fact, the national regulator in the country is embracing cryptocurrencies and predicting that
their use will increase. regulators in South Africa have been trying to find a middle path that enables them
to check on such scams while also ensuring that the benefits of cryptocurrencies can be realized.
• Countries with crypto exchanges but no regulatory framework: Cameroon, Côte d’Ivoire, Ghana,
Nigeria, Senegal, and South Africa
• Countries that allow trading but do not provide an exchange: Botswana, Kenya, Zimbabwe
• Countries that outrightly prohibited Crypto trading such as Tanzania, Algeria and Morocco
African countries are creating their own digital currencies

• We have to acknowledge that digital currencies’ potential to expand financial inclusion, and improve
traceability, safety, and efficiency of payment systems instead of crypto currencies according most of the
African countries took their steps to create their own digital currency/
• The CBDCs, unlike cryptocurrencies like Bitcoin and Ethereum, are developed by central banks and pegged
on countries’ fiat currencies.
• In October 2021 ,Nigeria launches eNaira, First Digital Currency in Africa Launching the eNaira, the
President said that the adoption of digital currency will increase Nigeria’s GDP by $29 billion over the
next 10 years,
• Already, nine African countries are in the research stage, ahead of the adoption of digital currencies.
Seven of these – Kenya, Madagascar, Eswatini, Rwanda, Ghana, Morocco, and Tunisia – are listed by the
US think-tank, Atlantic Council on its Central Bank Digital Currency tracker.
What are CBDCs and how do they work?

• A Central Bank Digital Currency (CBDC) is a country’s official currency in digital form. Instead of paper
money, the apex bank issues electronic coins and notes that are backed by the government.
• CBDCs are similar to existing cryptocurrencies (such as Bitcoin, Ethereum, etc) in the sense that both are
transferred electronically and blockchain-based. Blockchain is a type of distributed ledger technology.
• However, one of the major differences is that while cryptocurrencies are designed to be decentralized (that is,
not regulated), digital fiat currencies are deployed on centralized2 and private blockchain networks that are
supervised by a central bank.
• The plan of adoption of central bank digital currency (CDBC) by several African countries has been on the
rise due to the promise of a more efficient financial system Bitcoins and other cryptocurrencies have to offer.
 How Common is Crypto?
• Out of 74 countries in the Statista Global Consumer Survey, Nigerians were the most likely to say they used or
owned cryptocurrency.
• The second and third highest rates of cryptocurrency use in the survey were recorded in Vietnam and the
Philippines, respectively. Again, remittance payments play a role in the widespread use of cryptocurrency.
According to bitcoin.com,
• The Philippines' Central Bank has approved several crypto exchanges " in the country. The government is
already meddling in cryptocurrency by setting up blockchain app bonds.ph
• In addition one more world region where many cryptocurrency users are located is Latin America. Peru leads
adoption with 16 percent, while Brazil, Colombia, Argentina, Mexico and Chile all reached double digits.
• Switzerland was the country with the highest adoption rate in Europe together with Greece (11 percent
each).
• In general, European and Anglo nations had very low levels of adoption.
• Japan, finally, was the country in the survey where the fewest people said they used or owned cryptocurrency.
Only four percent said they had experience with crypto products.
References
•After Zambia, Kenya explores possibility of a digital currency | TechCrunch
•Central African Republic adopts bitcoin as legal tender (cnbc.com)
•2021 Crypto Regulations in Africa - Crystal Blockchain Analytics for Crypto Compliance
•Crypto is Growing in Africa - allAfrica.com
•• Chart: How Common is Crypto? | Statista

•More African central banks are considering digital currencies | TechCabal

•What countries use cryptocurrency the most? | World Economic Forum (weforum.org)
•BitPesa Review: Send Money Instantly to Africa Using Bitcoin - Africa Money Transfers
•Move over Bitcoin; these African countries are creating their own digital currencies | Business Insider Africa
•Why Africa is the next frontier for digital currency - CoinGeek
•Africa′s quiet cryptocurrency revolution | Africa | DW | 08.10.2020
•Africa’s Crypto Market has Grown by $105.6 Billion in the Last Year - The Tokenist
•Digital currency-related attacks among top cyber threats in Africa: Kaspersky - CoinGeek
•Only 10 African Countries are Actively Into Cryptocurrency, How About the Other 44? (technext.ng)
•The Top 5 African Countries That Are Embracing Bitcoin (bitcoinafrica.io)
•How bitcoin met the real world in Africa | Reuters

•Central African Republic adopts bitcoin as legal tender (cnbc.com)