Africa has emerged as a continent with significant interest in cryptocurrency. It has some of the youngest and fastest-growing populations in the world, with massive potential for digital asset adoption.
According to BitcoinAfrica.io, South Africa, Nigeria, Zimbabwe, Kenya and Ghana are the top five African countries adopting Bitcoin (BTC), with the most demand for digital cuurrency and the most active local cryptocurrency communities.
In 2023, many cryptocurrency initiatives were taken by different African governments. Cointelegraph looks back over the year through the lens of African crypto initiatives, the addoption rate in African countries, new regulations, and the degree to which businesses embrace cryptocurrency transactions.
South Africa
South Africa has made significant progress in cryptocurrency regulation, second only to the Central African Republic. South Africa’s regulatory initiatives include taxing cryptocurrencies since 2018 and recognizing them as digital assets.
South Africa’s Advertising Regulatory Board included a new clause for the cryptocurrency industry to protect consumers from unethical advertising, and the country’s financial regulator, the Financial Sector Conduct Authority, announced that all crypto exchanges must obtain licenses by the end of 2023.
Good news, everyone! CryptoQR is now active at all Pick-n-Pay stores across South Africa, including PnP express and clothing shops! You can also buy Airtime and Electricity, Plane and Bus tickets, and pay your municipal bills with #Bitcoin at the till! pic.twitter.com/3hVhgIJdTb
— CryptoQR ⚡️ (@CryptoConverted) February 1, 2023
South African grocery retailer Pick n Pay is also accepting Bitcoin in all its 1,628 stores following a three-month pilot testing phase in 39 locations.
Nigeria
Despite a national internet penetration rate of only 40% and a government ban on banks from dealing in cryptocurrency since February 2021, Nigeria is among the world leaders in crypto adoption. It is second on the global crypto adoption index — behind only India — with a young and tech-savvy population increasingly turning to cryptocurrency to meet their financial needs.
In Nigeria, cryptocurrency adoption is much more multifaceted. Crypto is often the most efficient way to conduct financial transactions. However, Nigeria owes its widespread crypto adoption to currency hedging, international trade and remittances.
The Central Bank of Nigeria (CBN) has lifted restrictions on Nigerian banks facilitating cryptocurrency transactions. The CBN recognized that the increasing global demand and adoption of crypto make it unjustifiable to maintain the stringent restrictions imposed on financial institutions in 2021.
The Nigerian Securities and Exchange Commission (SEC) has started processing crypto exchange and custodian license applications. However, many popular exchanges, like Binance, have not received a license. Despite this, many peer-to-peer exchanges operate in Nigeria today.
The Nigerian SEC also set up an eight-month regulatory sandbox for various crypto service providers and signals support for tokens based on assets like equity, debt or property known as real-world assets tokenization efforts, except for cryptocurrencies like Bitcoin and Ether (ETH).
In May, Nigeria’s former President Muhammadu Buhari signed the Finance Act, 2023, into law. The act introduces a 10% tax on gains from the disposal of digital assets, including cryptocurrencies.
Kenya
Cryptocurrency adoption has gained traction in Kenya, positioning the East African nation as a potential technology hub in Africa.
In May, according to a newly introduced bill, Kenyan lawmakers considered introducing a 3% tax on cryptocurrency and nonfungible token transfers and a 15% tax on monetized online content. In the same month, the Kenyan government inked a deal with Abu Dhabi-based blockchain platform Venom Foundation to launch a blockchain and Web3 hub in Africa.
Kenya will now tax
— Mpumelelo Ndiweni (@mpumiglobal) May 4, 2023
- crypto
- monetised online content pic.twitter.com/1mlJ5dXt83
Kenya might become the first country in the world where the industry’s representatives develop the regulatory framework for crypto. In November, the Blockchain Association of Kenya announced that the National Assembly’s Departmental Committee on Finance and National Planning has directed it to prepare the first draft of “what could become a virtual asset service provider’s bill.”
Central African Republic
The Central African Republic (CAR) has made significant progress in cryptocurrency regulation, making it one of the most active in crypto innovation. In the spring of 2022, the CAR became the first African country to adopt Bitcoin as legal tender. However, this was shortlived as the government began its crypto token project, Sango Coin, days after the Bitcoin law was enacted.
In January 2023, the CAR set up a 15-member committee responsible for drafting a bill on using cryptocurrencies and tokenization in the region.
In August 2023, the CAR extended its Sango blockchain project to tokenize its land and natural resources.
Ghana
Ghana has quietly emerged as a noteworthy player in the cryptocurrency space. With minimal government or central bank interference, Ghana has embraced cryptocurrencies without significant regulatory hurdles.
In a report released by blockchain analytics platform Chainalysis, researchers found that Ghana has the potential to achieve crypto adoption levels similar to Kenya and Nigeria, countries that ranked 11th and 19th in the analytics firm’s Global Crypto Adoption Index.
The Ghanaian securities regulator has reportedly established a task force expected to help it boost its capacity to regulate crypto assets. Ghanaian residents have continued to trade and invest in cryptocurrencies, forcing the regulator to think of ways to protect crypto users.
While the Ghanaian securities regulator has not established any cryptocurrency regulation, the government does not prohibit it.
And that’s a wrap on Africa’s crypto leaders and the developments that emerged in 2023. As Africa’s interest and contributions to cryptocurrency continue to develop rapidly, 2024 looks set to be just as packed with new developments.
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