A new report from Togo-based Ecobank says that, like regulators elsewhere, African regulators are confused about technical, political, and economic ramifications of cryptocurrencies and are largely taking a “wait-and-see” approach to regulating crypto sectors and activity there.
The report, “Cryptocurrency Regulation in Africa,” published August 1st, says that an overall crypto market “surge” of 4000% in 2017 essentially rendered regulators agog and clouded their ability to consider the purported benefits of new currency tech like Bitcoin and the thousands of variations spun off that theme.
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According to the report, a general sense among regulators and the public that:
“Crypto tokens and currencies could enable consumers to transact instantly, cross-border and for free, provide them with KYC-compliant digital IDs, and incentivise their behaviour and change the way they engage with governments & service providers…”
…combined with concerns about citizen’s “overexposure,” “a future crash,” money laundering and capital flight, “have produced scepticism of licensing their use,” in Africa.
But rather than curtailing speculation, says the report, regulatory vagaries in Africa and elsewhere, combined with hype and a lack of technical understanding generally, “…have all combined to create the perfect breeding ground for speculators to thrive.”
A few African countries currently sit at polar extremes regarding regs, says the report.
Namibia is so far the only African country to entirely ban cryptocurrencies. And though, “South Africa and nearby Swaziland offer two of the most favourable regulatory stances in Africa,” most African regulators have simply remained mum:
“With the exceptions of Cameroon, Rwanda and Senegal, no other Francophone government or central bank has made a policy statement on virtual currencies.”
As a result, entrepreneurial undertakings involving crypto in Africa largely take place in a a regulatory no-man’s-land:
“In these countries the best a cryptocurrency innovator can hope to achieve is a ‘no objection’ to trialling the product rather than formal authorisation and (ultimately) legislation to match.”
The report also states that a lack of clear rules governing crypto also imperils citizens holding or trading them.
African consumers, essentially, “use (cryptocurrencies) at their own risk.”
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