Regions such as the EU are set to adopt a unified approach to regulating Cryptocurrencies and Blockchain technology. However, African countries have contrasting standpoints casting doubt of whether the continent will ever achieve consensus to realize economic benefits that are accrued to uniform Digital Tokens and DLT regulations regionally.
For instance, reports show that Namibia and Zimbabwe intend to prohibit the use of Cryptos and Blockchain. On the other hand, Mauritius is set to embrace the technology on the basis of the economic dividends that Tokenization proffers.
Africa Is An Important Market For Digital Money Transfers
The rapid growth in mobile money adoption in Africa came as a surprise to the world as only a few experts thought that the continent could be capable of embracing new technology. In a span of 10 years, mobile penetration surged from a paltry 3% to 80% making it possible for mobile money platforms to leverage the new technology to offer payment solutions.
Africa has, therefore, become the fastest growing market for Digital solutions for money transfer and this shows that need-based Blockchain technology could have the same reception. This is because disruptive e-payment services are ideal for Africa.
There Is An Unbanked Population
Data shows that sub-Saharan Africa has the second highest population of unbanked adults globally. The 350 million people lack a bank account and Blockchain and Cryptocurrencies could offer them financial inclusion benefits.
For instance, data indicates that there is a dire need for remittance mechanisms that are independent of traditional banks which can be achieved through Blockchain platforms and Digital Tokens. Remittance is the main source of income for individuals and countries and an international platform can go a long way in offering solutions to the inefficient prevailing services.
Mixed Perspectives On Regulation
According to ‘The Guide to Blockchain and Cryptocurrency in Africa’ by Baker McKenzie, African policymakers have mixed perspectives that widely vary for Blockchain and Crypto regulation. As other countries explore DLT, others are banning it, while others are still speculating. This lack of a common framework can prevent the region from being an ideal avenue for innovative monetary transactions that connect the peoples.
Specific Cases Of Differences In Regulation Views
Zimbabwe and Zambia have a hard stance on Cryptos and Blockchain and they are prohibiting their nationals from investing in Digital Tokens.
On the other hand, Mauritius is setting a good example by providing a regulator sandbox that is very progressive even by global standards.
In East Africa, Kenya is taking a pragmatic approach. The country has constituted a task force that is exploring the use of AI and Digital Tokens. Before the commission has published its findings, the Kenya National Land Commission has already gone ahead and adopted Blockchain for its lands registry to alleviate fraud in land transactions. The country’s private sector is also embracing DLT with TMT Global Coin offering Blockchain-based logistics services.
In West Africa, the central bank of Nigeria is releasing a whitepaper on the risks and opportunities of Cryptocurrencies on the Nigerian economy ahead of regulation.
A Likely Solution
However, there is likely for a solution for a common regulation as the African Union has recently ratified the CFTA – Continental Free Trade Area consisting of 22 countries.