Africa Steadily Embraces Cryptocurrency
The Global Digital Report 2019 also placed other sub-Saharan African countries such as Ghana and Kenya within the top 45 nations in the world where a large number of people owned cryptocurrency such as bitcoin. The results were based on the survey of internet users aged between 16 to 64 years during the six months to September 2018.
The survey confirms that Africa has embraced the digital currency revolution. A growing number of people on the continent are utilizing cryptocurrency to fulfill both personal financial needs and entrepreneurial ventures such as transferring goods, services and money internationally and domestically.
There is also an emerging generation of Africans buying virtual currencies as investment vehicles, while a relatively small number of Africans trade digital currencies speculatively for profit.
In, 2018, Paxful Inc., a peer-to-peer bitcoin exchange, reported seeing significant growth in Africa. The U.S.-based company said Africans now accounted for the largest number of people buying and selling cryptocurrency on its platform, with average monthly transactions totaling $64.5 million.
Over the past year, users from the African continent of 1.2 billion people soared by 225 percent, Ray Youssef, chief executive officer of Paxful, said. Transactions on the exchange climbed 60 percent in Nigeria, Africa’s biggest economy, 25 percent in South Africa, the continent’s most sophisticated economy, and by up to 100 percent in other parts of Africa.
South Africa Consults on Crypto Regulation
The top ranking for South African cryptocurrency ownership comes at a time when monetary authorities in the country have asked the public to make submissions on policy and regulatory proposals for crypto assets like bitcoin. There is currently no regulation for cryptocurrencies in South Africa, a situation which has prompted the South African Reserve Bank (SARB) to come up with measures that provide legal protection or recourse to investors and users.
Whereas the rest of the South African financial system is tightly regulated to prevent issues of market failure, the crypto market isn’t, SARB said. In its policy paper, the central bank makes several proposals including leaving crypto-assets without legal tender status, so as not to recognize them as electronic money.
The document also recommends that an appropriate regulatory framework be developed through a registration process for crypto-asset service providers. It also proposes a review of existing regulatory frameworks followed by new regulatory requirements or amendments to existing regulations.
“The phased approach, starting with the registration requirement, could lead to formal authorization and designation as a registered/licensed provider for crypto asset services operating in South Africa at a later stage,” states the central bank.