Cryptocurrency Adoption Skyrockets Across Africa: Review of 2023 Developments and Forecasts for 2024
Summary:
This article details the rising interest and adoption of cryptocurrencies across Africa, with South Africa, Nigeria, Zimbabwe, Kenya, and Ghana leading the way. It discusses regulatory measures, rates of adoption, business integration and crypto initiatives launched by various African governments in 2023. South Africa has emerged as a significant player, while Nigeria, despite certain limitations, ranks second worldwide in crypto adoption. Kenya is establishing itself as a potential tech hub, the Central African Republic is innovating in crypto regulation, and Ghana is displaying significant growth in the crypto space. The piece concludes with expectations of more developments in African cryptocurrency sector in 2024.
Cryptocurrencies have seen a rising interest in Africa, a region with some of the fastest growing and youngest demographics in the globe, giving it great potential for digital asset usage. BitcoinAfrica.io reports that the leading African countries adopting Bitcoin are South Africa, Nigeria, Zimbabwe, Kenya and Ghana, boasting the largest demand for digital currencies and the most active local crypto communities. Throughout 2023, numerous cryptocurrency initiatives were launched by diverse African governments, offering a relevant look at African crypto strategies, rates of adoption, new regulatory measures, and the extent to which businesses are adopting cryptocurrency transactions.
South Africa is making headway in terms of cryptocurrency regulation, coming second to only the Central African Republic. The initiatives include taxing cryptocurrencies since 2018 and acknowledging them as digital assets. The Advertising Regulatory Board of South Africa has also incorporated a new segment for the cryptocurrency sector to safeguard consumers against dishonest advertising. In addition, the Financial Sector Conduct Authority of South Africa has declared that all cryptocurrency exchanges must secure licenses by the close of 2023. Moreover, the well-known South African grocery retailer, Pick n Pay, has started accepting Bitcoin in all its 1,628 branches following a successful three-month trial phase in 39 stores.
In spite of having an internet penetration rate of just 40% and a government prohibition on banks dealing in cryptocurrency since February 2021, Nigeria ranks second worldwide in crypto adoption, thanks largely to its young and tech-savvy population. In Nigeria, crypto adoption goes beyond mere financial transactions as it's also largely used for currency hedging, international trade, and remittances. The Central Bank of Nigeria (CBN) has lifted its previous restrictions on banks facilitating cryptocurrency transactions, acknowledging the increasing global demand for crypto is too significant to maintain hard restrictions on financial institutions. Crypto exchange and custodian license applications are now being processed by the Nigerian SEC. While not all popular exchanges have yet received licenses, peer-to-peer exchanges continue operating, and the SEC is encouraging tokens based on assets like equity, debt, and property. In May 2023, a 10% tax was imposed on digital assets gains, including cryptocurrencies, following the signing into law of the Financial Act, 2023 by the country's former President, Muhammadu Buhari.
Kenya is also seeing an increase in cryptocurrency adoption, putting the country in a prime position as a potential tech hub in Africa. In May, a proposed bill saw Kenyan lawmakers considering introducing taxes on cryptocurrency, and a deal was signed with the Abu Dhabi-based blockchain platform Venom Foundation in the same month to launch a blockchain and Web3 hub in Africa. In a first, the regulatory framework for the crypto industry in Kenya is likely to be developed by industry representatives themselves. A proposition from the Blockchain Association of Kenya directed the National Assembly’s Departmental Committee on Finance and National Planning to prepare the first draft of a virtual asset service provider’s bill.
The Central African Republic (CAR) has also made big strides in cryptocurrency regulations and innovation, being the first in Africa to legalize Bitcoin as a tender. Even though this decision was reversed shortly, the CAR immediately launched its crypto token project, Sango Coin. A committee was set up in January 2023 by the CAR Government tasked with creating a bill on the use of cryptocurrencies and tokenization in the region. The CAR’s Sango blockchain project was expanded in August 2023 to tokenize the country’s land and natural resources.
Ghana, although operating in the shadow of its African counterparts, has surfaced as a significant name in the cryptocurrency world. The country has embraced cryptocurrencies without interference from the government or central bank or significant regulatory obstacles. A report by blockchain analytics platform Chainalysis suggests that Ghana could achieve crypto adoption levels on par with Kenya and Nigeria. A task force was established by the Ghanaian securities regulator expected to improve its ability to regulate crypto assets. Despite the absence of set regulations, trading and investment in cryptocurrencies remain unrestricted in Ghana.
Africa's involvement in the cryptocurrency sphere continues to grow, and 2024 promises to bring plenty more developments to the table in this rapidly advancing industry.
Published At
12/27/2023 1:30:00 PM
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