A blog post by an international organization published on November 22nd states that the International Monetary Fund is (IMF) is advocating for more regulation of crypto exchanges in Africa, which is one of the markets with the highest growth rate in the world.
The fall of FTX, and its subsequent impact on cryptocurrency prices, “reignited calls for increased consumer protections and regulation of the industry.” According to the International Monetary Fund (IMF), regulation is one of the main reasons countries in the region should adopt it. This is one reason why the IMF stated that countries in the region should adopt regulation.
The authors also claim that crypto assets pose risks and that it is time to regulate to ensure that there is a balance between innovation and risk.
Based on the Regional Economic Outlook of sub-Saharan Africa, October 2022, the article warns that crypto could be adopted as legal tender, which would pose a threat to public finances, if governments accept crypto payments.
According to statistics from the IMF, only 25% of sub-Saharan African nations have explicitly controlled cryptocurrency, while the other third have established certain restrictions.
On the contrary, Cameroon (Ethiopia, Lesotho and Sierra Leone), Tanzania, the Republic of the Congo, and Lesotho have all banned the use of cryptocurrency assets. Twenty percent of nations are located in the subsaharan region.
The largest concentrations may be found in South Africa, Nigeria and Kenya.
Chainalysis’ statistics show that Africa’s cryptocurrency markets grew more than 1,200% from July 2020 to June 2021, according to Chainalysis. The main driver of the growth was increasing adoption in Kenya (South Africa), Nigeria, and Tanzania.
Cointelegraph reported that Ghana is currently testing digital currencies to be issued from the central bank (CBDC).
Chainalysis’ Global Crypto Acceptance Index ranked Nigeria at 19th and Kenya at 11th, respectively. Ghana could achieve levels of cryptocurrency adoption similar to Nigerian and Kenyan.
