The third week of January 2022 is coming to an end, and a lot has happened in Africa’s crypto industry. As expected, this is the month when a lot of developments around the crypto industry would be initiated, giving us insight into the rest of this year’s developments. The trending news has been about the regulation of cryptocurrency in South Africa, and that’s where we will start.
Through the Financial Sector Conduct Authority (FSCA), the South African government is set to put regulations that will control the use of cryptocurrency. This move has been necessary due to the increasing number of South Africans involved in cryptocurrency transactions. According to a Triple-A report, over 4.2 million individuals, 7.1% of the South African population, own cryptocurrencies.
The second reason is the rising in crypto scams. Some of the biggest crypto scams in Africa have happened in South Africa. The Mirror Trading International (MTI) and Africrypt, for example, disappeared with crypto worth billions of dollars.
According to FSCA, the regulator wants to be able to intervene whenever they feel that customers are being sold products that they do not understand.
According to Marius Reitz, Luno’s general manager for Africa, while speaking to businesstech.com, he said that regulation of cryptocurrency is good for SA and will also have a positive spin-off for the crypto sector.
The object of the regulations by the South African government is to have cryptocurrency regulated by the end of 2022 to protect the vulnerable in society.
From the South of Africa, we head to Eastern Africa to meet another bubbling crypto hub, Kenya. The country is known for its fast technology adoption, and this can be seen in the budding mobile money system, M-Pesa.
With a successful mobile money system and a youthful, tech-savvy population, Kenya was prepared for crypto adoption. The crypto industry is booming, and the country will need to scale up in 2022. Kenya is experiencing a fast-growing community of crypto holders, and crypto remittance is growing fast.
According to Marius Reitz, Luno general manager for Africa, Kenya might again lead in p2p traded volumes for the second year running. This is after the country topped South Africa in the volume of p2p volumes in Africa. This shows the fast-growing level of crypto adoption in this East African country.
However, there is still a problem streamlining the cryptocurrency market with the mainstream financial sector. The Kenyan government has banned cryptocurrency, which is a big bottleneck for the thriving crypto market.
Like SA, the fast-growing crypto market might force the Kenian government to reconsider the ban and put in regulations to facilitate a smoother crypto adoption.
Back in Southern Africa, Malawi is another country that might start working on regulations to adopt cryptocurrency. According to nyasatime.com, many factors lead to the fast-growing interest in crypto in Malawi.
First, the issue of the local population losing confidence in the national currency due to high levels of fluctuation. The situation leads more people to buy Bitcoin and other cryptocurrencies for value storage, as foreign currencies are not available. This might expose the population to rogue crypto companies and could end up losing their money to scams.
Second is the fast-growing crypto trading in Malawi. The rising crypto adoption rate and the factors surrounding it might make the Reserve bank of Malawi take action and provide guidelines on how crypto will be handled in the country. This will include regulating the traders to reduce the risk of the population losing their investments.
The benefits to the Malawian economy with a regulated crypto market will be huge, and the economy might recover at a quicker rate. So the government of Malawi might be making a move to facilitate crypto adoption.
Apart from the governments regulating the crypto market, African crypto companies have made big moves in the industry. The biggest mover has been Carry1st, a games developer that raised $20 million on a Series A extension led by Andreessen Horowitz (a16z).
This is the first a16z investment for an African company. Other companies that participated in this extension round are Avenir and Google. This is the second time that Google is releasing funds from its Africa Investment Fund. Prominent individual investors like Nas and the founders of Chipper Cash, Sky Mavis, as well as Yield Guild Games, also participated in the extension investment
This round is an addition to the Series A the companies raised last May from Raine Ventures, TTV Capital, Riot Games, and Konvoy Ventures. The success of the previous round has seen the investors double their investment.
Carry1st, a South Africa-based company, started in 2018 and has 37 individuals across 18 countries developing the gaming platform. The team wants to use the additional capital to scale interactive content across Africa.
Last on our weekly news digest is the exit of the OVEX from the crypto arbitration market. OVEX has made a mark in the South African crypto market by popularising cryptocurrency arbitrage. The company announced that it is exiting the arbitrage market to focus on its ambitious multi-country expansion program that is bringing its OTC (over-the-counter) services to several countries in Africa.
The move comes after the company diversified its services over the last few years. As OVEX CEO Jon Ovadia says, crypto arbitration was only accounting for 6% of the business the company is handling today. This is a small part of the operations hence the need to exit the market and focus on expanding new and highly potent markets.
The company’s OTC services target high-net-worth individuals and institutional investors looking for large cryptocurrency volumes with minimal slippage and low transaction costs. This is a big market with the growing crypto adoption in Africa.
That’s what we have for you in this week’s News Digest. Keep up with the latest updates on the African crypto industry by following us on our social media platforms. Follow us on Twitter: https://twitter.com/KamPayToken and join the conversation on our Telegram channel: https://t.me/KamPayOfficial.
A passionate Crypto investor since 2012, with deep understanding of marketing and business development, over the past few decades Dov Marcus has built many successful multi-million businesses as an entrepreneur and as an investor.