Formulating regulatory frameworks in Africa’s crypto sector

High demand for crypto set to influence novel regulatory frameworks on the African continent.

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The embrace of crypto assets is causing a remarkable shift in government and regulator attitudes on the African continent. According to Atlantic Council’s GeoEconomics Center’s CBDC tracker, countries on active research mode include South Africa, Ghana, Tunisia, Morocco, Madagascar, eSwatini, Kenya and Rwanda. They are looking to forge policies and regulatory frameworks that will support both existing crypto assets and their governments’ state-owned Central Bank Digital Currencies (CBDCs), albeit with a notable level of hesitancy from some.

As an example, in its position paper on the regulation of crypto assets published with the support of the country’s Department of Treasury in June 2021, South Africa’s Intergovernmental Fintech Working Group (IFWG) seemed at pains to explicitly state that bringing crypto assets into the regulatory remit should not be viewed as an endorsement thereof, but rather as a means to “promote responsible innovation”.

Some North African countries, the likes of Libya and Morocco have demonstrated their skepticism by imposing bans on the use of digital currencies.

“The most common position, however, is one of caution… countries such as Namibia and Burundi, while also not banning usage, have issued bans against trading, citing the lack of consumer protection as the motive,” according to a report by Arcane Research.

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