The central bank of Zambia (BoZ) has recently declared that cryptocurrencies are not actually a valid tender. What do other countries on the continent think of the digital money?
The Zambian central bank said that cryptocurrencies aren’t legal tender. The watchdog warned people that they are trading crypto at their own risk and would have no recourse to any authority in the event of fraud.
BoZ also accused digital assets of increasing the risk of “money laundering, financing activities of terrorism and general consumer protection risks such as fraud and hacking.” However, the regulator added that it will continue “to actively monitor” all developments in the crypto markets.
It is worth noting that cryptocurrencies feel much more at ease in many other countries. Most people in Africa do not have a bank account, but this does not prevent them from fully using financial services. To do this, they use mobile applications based on crypto operations. In many areas where there are no banking institutions, digital assets have replaced traditional banking operations. According to many analysts, inflation in Africa and the deplorable state of their economies are a fertile ground for the further development of the crypto market on the continent.
The report, published by the Pan-African Bank Ecobank, suggests that residents of 36 African countries are actively using cryptocurrencies. South Africa and Swaziland even adopted a favorable and liberal digital asset management policy. Ecobank also stresses that most African countries take a wait-and-see approach to legalize transactions using electronic currencies, still fearing the potential risks of participating in the crypto economy.
The exception was Namibia. Namibia’s central bank, Bank of Namibia, has emphasized that Bitcoin and other cryptocurrencies are not legal in the country. Representatives of the country's central bank banned virtual currency, citing a law from the middle of the last century. The Bank of Namibia said that bitcoin operations are not a place in the country, and cryptocurrency will not be a means to pay for goods and services. The position paper of the Bank of Namibia cites previous research by the International Monetary Fund and the Financial Action Task Force, a global intergovernmental anti-money-laundering organization. In other statements, it further elaborated on its interpretation of the relevant domestic law. For example, Namibia's Exchange Control Act of 1966 "does not make provision for the establishment of virtual currency exchanges or bureaus in Namibia."
Ecobank distinguishes South Africa and Swaziland as countries that have proposed the most favorable regulatory conditions for the cryptocurrency market in Africa. Earlier, the head of the central bank of Swaziland, Majozi Sithole, said that his financial institution and officials would not hinder the development of cryptocurrency, but on the contrary, they would support them in every way. He stressed that it was necessary to study them, and then implement and maintain them. But first of all, it is necessary to deepen the knowledge in cryptocurrencies.
Earlier, the Binance crypto exchange also teamed up with the blockchain organization Crypto Savannah from Uganda to support the economy of the East African country. The main objective of the partnership is the economic transformation of Uganda by creating new jobs and attracting investment. Uganda is currently one of the poorest countries in the world with a per capita GDP of $2,000.
In Kenya, the launch of the first ever cryptocurrency in the history of the country, called TMX Global Coin, is being prepared. It is expected that by May 2019 it will be fully implemented in the country's economy. The main focus for the developers of the coin was its use for solving logistical problems. TMX will allow its users to find the best deals among thousands of online stores, and then select a forwarder who will coordinate the delivery of goods, using a convenient interface. TMX will also monitor the delivery process at all links in the chain and receive all the information about the necessary documentation before the start of the trade itself. In summer, the first cryptocurrency ATM in entire East Africa was installed in Nairobi. You can now buy cryptocurrency for cash dollars or Kenyan shillings.
Last week, Kubitx, a pan-African financial startup registered in Malta, announced a beta launch of a cryptocurrency platform. The platform, which currently supports seven popular cryptocurrencies, will initially be available to users in Nigeria before the company expands its use to other African countries, which is planned to be done in the coming months. Representatives of the project chose Nigeria as a testing ground for running our platform, because, in their opinion, active young people in this country are positive about cryptocurrencies and are already using them.
In addition, many African startups are innovators in the use of blockchain. So, Bitland (Ghana) allows people to record land sale deals with the help of the blockchain in order to prevent its unlawful loss. Another company, Custos Media Technologies (South Africa), is struggling with the blockchain against digital piracy.
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