In this week's news digest, we will look at some of the big crypto-related news that made headlines in Africa. The crypto industry is growing fast, and more governments are now reconsidering their earlier decisions to ban digital currency. The latest to consider introducing digital currency is Kenya. That's where we will start our weekly Digest…..
Kenya is one of the countries with a huge cryptocurrency adoption in Sub Sahara Africa. It is ranked second after Nigeria in the amount of money transferred via P2P platforms. The Central Bank of Kenya (CBK) has invited citizens' views on central bank digital currency (CBDC). This is the first step the country is taking to introduce digital currency and might be third in Africa after Ghana and Nigeria have already piloted their CBDC.
The CBDC will have a huge impact on monetary regulations and will make it easy for the CBK to control the financial market. The cost of printing currency will also be reduced with the introduction of digital currency.
However, the CBK governor noted that the introduction of this CBDC will be an effort to counter the influence of other cryptocurrencies like Bitcoin, which the CBK says are not attached to value. This means that the government might not let go of the banning that it had put on cryptocurrencies soon.
However, with the CBK already entering the cryptocurrency industry, there is a high chance of introducing cryptocurrency regulations. It will be a development to watch in the next three to four months.
The number of African countries exploring digital currencies is growing. Zambia is the recent country that has considered introducing central bank digital currency (CBDC). This is according to information released by an official at the Zambia central bank. The official revealed that the bank is carrying out feasibility studies on CBDC, which is currently in the advanced stages.
In the recent interview with Bloomberg, Nkatya Kabwe, the acting assistant director of communication at the Bank of Zambia, said the bank is looking into whether the CBDC can help the country cut costs and increase the inclusion of more Zambians into the formal financial system.
With the mobile system already doing well in the country, the bank wants to use the CDGC to put more control over the digital money economy. So there are so many benefits that might come with the central bank digital currency (CBDC).
Whether Zambia will launch the CBDC faster than Kenya and other African countries to become the second country after Nigeria remains to be seen. However, this is a good move for the crypto industry in Africa.
In other news, crypto adoption in Nigeria is rising despite the Central Bank of Nigeria banning cryptocurrency for a year now. From the studies done on two major P2P platforms that are widely by Nigeria transaction cryptocurrencies, there has been a rising number of transactions in the country.
From the data that was collected from Paxful and Localbitcoins, the biggest P2P platforms in Nigeria, the volume of the amount of money transacted on the P2P platforms has risen by o16% since the CBN effected a crypto ban. This is an indication that crypto adoption in the country is growing despite the ban by the government.
However, the government of CBN is also conducting research on rolling out its CBD. Therefore, there is likely to be some regulation of the cryptocurrency market in Nigeria upon the launch of the central bank digital currency.
Nigeria is currently leading in the P2P with volumes ranging from $400 million, followed by Kenya at around $160 million, and South Africa comes third at around $117 million.
In other news, South Africa's financial regulator announced its intention to regulate cryptocurrency a few weeks ago, and it looks like they have already swung into action. The Financial Sector Conduct Authority (FSCA) has started its crypto awareness campaigns, and the recent was warning against dealing with crypto exchanges.
These are exchanges that are not authorized to offer any financial services or even intermediary services in South Africa. They include the FTC Exchange, which has its headquarters in the Bahamas, and Seychelles-headquartered ByBit. Both companies have been offering crypto exchange services in South Africa.
FTX, which has been the most active company in the South African crypto industry, made a quick response to the warning through its CEO, Sam Bankman-Fried. In a tweet, he expressed the company's willingness to engage with FSCA and iron out all the issues cited by the financial authority.
The same case for the ByBit Exchange, where the spokesman said the company has been in correspondence with the financial authority. More of these interventions by the Financial Sector Conduct Authority are expected going forward as the cryptocurrency regulations develop. This is what the FSCA has had promised as part of the regulation – creating awareness.
The last of the top crypto news that came out of Africa this week is the governments' small support of the technology-driven startups, and this includes the crypto-related startups. According to research done on 32 African countries, it was found that out of the 188 incentives across 10 countries, only 14 incentives, which is equivalent to just 7% of startups, that goes to technologies.
When speaking to Sci Dev Net, Shireen Ramjoo, CEO, Liquid Crypto-Money, Johannesburg, noted that African governments are also not adopting most of the digital technologies and solutions that have been developed by the startups, which makes it difficult for them to grow.
As the largest consumers, African governments can play a critical role in startups development by simply adopting the technologies and delivering citizens' services. That's according to Shireen Ramjoo. But that is not happening at the moment.
According to the Sci Dev Net, experts also noted that most countries in Africa are not funding the growth of skills, and that's why even crypto adoption is slow. The number of crypto-related startups has been small as the number of coders and skilled software developers is small. Therefore, a lot needs to be done to
These are the top interesting crypto-related news coming out of Africa this week. Follow our social media platforms to keep up with the latest updates on the African crypto industry. Check out our Twitter and Telegram for recent updates.
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