Bitcoin (BTC) in Africa: Opportunities and Challenges

The crypto market in Africa is showing some growth, and the first regulatory questions are already arising. After the collapse of FTX and all the consequences that followed, the urgency to regulate the sector is more pressing. However, regulating an industry as volatile as virtual currencies remains a real challenge. Especially sincecurrently in Africa, only 25% of countries officially regulate crypto.

The African Crypto Market and the Need for Regulation

The African crypto market: finally real regulation?

Caution is in order since the second exchange in the world in terms of trading volume is in disgrace. The failure of FTX precipitated the fall in the price of bitcoin and some major altcoins like Ethereum. Inevitably, in view of the proportions assumed by this bankruptcy, the time has come to a real regulation in Africa.

the crypto market in africa is the fastest growing in the world, according to chain analysis. However, it remains the one where there are still the fewest transactions. While countries like Nigeria, Kenya and especially South Africa are leading the way and showing a certain consistency in their desire to regulate the sector, many other countries, on the other hand, continue toban crypto. In this register, there are countries such as Cameroon, Lesotho, Congo and the DRC, to name a few.

African governments fear the impact that the crypto volatilitybecause they cannot be used as stores of value. On the other hand, central banks may no longer have a monopoly on money. What could really harm the Monetary Policy and compromise in some way the financial stability.

Even though some countries adopt crypto, they do so as a singleton in defiance of community provisions. The most evocative case of this disparity in crypto regulation is CAR’s adoption of bitcoin as the official currency. By deciding to regulate bitcoin and therefore crypto, the CAR has alienated the Economic and Monetary Community of Central Africa (CEMAC). Indeed, the CEMAC treaty formally prohibits the adoption of a currency other than the CFA Franc. Likewise, all crypto transactions within the sub-region are strictly prohibited.

Conclusion

Crypto continues its democratization on the African continent. The African crypto market is growing faster than any other in the world. Nevertheless, the issue of regulations remains suspended, despite recent events which call for greater caution.

Receive a digest of news in the world of cryptocurrencies by subscribing to our new service of newsletter daily and weekly so you don’t miss any of the essential Tremplin.io!

Similar Posts