Cryptocurrency has gained popularity in Africa over the years. With more people realising the economic freedom that comes with this emerging financial technology. It is a completely digital form of money that operates on a decentralised network known as the blockchain. The most popular cryptocurrencies in the world right now are Bitcoin, Ethereum, Binance Coin and Tether.
The tendency of cryptocurrency to skyrocket in value has encouraged a lot of Africans to start trading in the digital currency. Cryptocurrencies have been considered to be a viable path out of poverty in Africa due to the low barrier to entry as a cryptocurrency trader. With as low as $5 dollars you can start trading Ethereum, the cryptocurrency currently trailing Bitcoin.
However, the decentralised nature of cryptocurrencies has raised concerns in some Africa countries. Worried that digital currency can be used for fraud or funding terrorists, these countries have decided to impose tough regulations that make it very difficult to trade in cryptocurrencies. While it’s impossible to actually ban cryptocurrencies because they are powered by the internet and banning them will mean shutting down global internet access, some of these countries have either declared cryptocurrencies illegal or made it almost impossible to buy them.
Countries that have outlawed cryptocurrencies include, South Africa, Angola, Namibia, Zimbabwe, Mauritius, Algeria, Egypt, Morocco, and most recently, Nigeria which has prohibited banks and financial institutions from trading in or facilitating transactions in cryptocurrencies.
Arguments have been made that rather than declare cryptocurrencies illegal, a better approach will be to regulate how it’s used. Since cryptocurrencies need to be traded in and out of fiat currencies, this enables governments to control their usage through taxation, regulation of exchanges and creating a framework for Initial Coin Offering (ICO) – the cryptocurrency industry’s equivalent of an IPO.
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