Regulation of Crypto in Africa
Africa is one of the fastest-growing crypto markets in the world, with crypto transactions peaking at $20 billion per month in mid-2021. Despite a surge in transactions, there is virtually no regulation governing cryptocurrency in the region, except in South Africa and Central African Republic.
Current Status
Notwithstanding the lack of specific legislation, most countries are taking steps to restrict or even ban cryptocurrency. However, South Africa is charting a different path by developing a regulatory framework to realise the benefits of crypto (albeit as an asset rather than currency). The Central African Republic is the first country in Africa, and the second in the world after El Salvador, to designate Bitcoin as legal tender.
Future Outlook
Policymakers are worried that cryptocurrencies can be used to transfer funds illegally out of the region and also to circumvent local rules to prevent capital outflows. In all likelihood, many countries will continue to discourage the use of crypto. A better way forward would be for regulators to adopt a measured approach - as demonstrated by South Africa - to ensure proper development of the technology. The bottom-line is that regulation must target activities, not technology.