Africa and its banking antiques: cryptocurrencies The solution?

The continent's technological progress is reflected in the rapid growth in the use of mobile phones, both as a means of payment and as a bank account. With over 100 million active mobile money users, who make approximately $ 2.1 billion in transactions each year, according to McKinsey & Company, Africa is a global leader in mobile-based financial settlements.

South Africa
The country is the second-largest economy in Africa after Nigeria, with a gross domestic product of $ 350 billion, according to the International Monetary Fund. In South Africa, cryptocurrencies are growing in popularity. Google Trends indicates that the highest number of bitcoin searches in the world occurs in the country of southern Africa. About 50% of South Africans plan to put in a cryptocurrency, says a poll of 2018 of Mybroadband. Africa's most sophisticated economy hosts a series of digital currency exchanges, including Luno, which operates in 40 countries around the world, enabling people to buy and sell digital coins such as bitcoins. in the local Rand currency. National finance companies are now starting to enter space. The asset management company Sygnia has announced its intention to open an exchange called Sygnia Coin in the last three months of this year. A myriad of startups emerge, driving the technology of the distributed ledger, including Tari Labs, based in Johannesburg, a blockchain incubator, directed by Riccardo Spagni di Monero.

The South African Reserve Bank (SARB) has tested a banking code system inter-code called Project Kohka, which operates on the Ethereum blockchain. With the goal of accelerating payments, the system turned out to be "extraordinarily good" during the simulated tests for real-time gross agreements between banks. The SARB does not recognize cryptocurrencies as legal tender, urging caution in their trade. The country's tax authority, however, has announced that profits from cryptocurrency transactions will be taxed in accordance with the Income Tax Act in South Africa

South Africa demonstrates an incredible potential to become a leader in blockchain development in Africa, leveraging its well-developed financial and technological infrastructure, friendly regulatory environment and growing public interest in virtual money.

Nigeria
In 2014, Nigeria eclipsed South Africa as the continent's largest economy, with a GDP of $ 400 billion. But huge inequalities, corruption and illicit financial flows still persist in the most populous nation of Africa. The blockchain / cryptocurrency sphere in Nigeria is carefully negotiated by central bank governor Godwin Emifiele who has compared cryptocurrencies "to a game of chance". The Nigerian Parliament has, however, initiated an investigation into the merits and errors in the adoption of bitcoins as a means of payment. Despite all this, the Nigerians continue to flood the cryptocurrency space in search of cheaper and faster ways to send money abroad – or receive it – and to protect themselves from inflation / losses related to the exchange of Naira, the local unit. According to Citigroup, the Nigerians represent the world's third largest bitcoin participation, as a percentage of the gross domestic product, after Russia and New Zealand. Ignoring the warnings of the financial regulators, a series of start-ups in the country took the initial offers of coins, a way used by emerging companies to raise funds by issuing new digital coins to the public. One of these companies is Sure Remit, a money transfer company, which has raised all of the $ 7 million on offer within two days of the ICO becoming public. There seems to be a silent admission by regulators that cryptocurrencies – and the blockchain technology that supports them – are in the Nigerian economy for the long run. Hence, efforts to understand virtual currencies to help with their adoption and regulation.

Pyramid scheme

Egypt, Morocco and Algeria
The uniformity between the three North African countries – some of the main economies of the continent – the outlaws cryptocurrencies in their respective economies are galvanized by their common religious beliefs. According to Islamic law "commercial and commercial transactions (should) be regulated by clear contracts and rules". Bitcoin does not, say religious leaders. Instead, it promotes tax evasion and terrorism among other financial evils, they say. In Egypt, the financial regulator denied having given the green light to a digital currency exchange called Bitcoin Egypt to open stores in the country. The Egyptian central bank said that the country's banking system operates "only with official currencies and never trades virtual currencies". Much of the trade in Egypt takes place underground, on social media platforms such as Facebook.

The situation in Egypt, the third largest economy in Africa, largely reflects what is happening in Morocco and Algeria. The Moroccan exchange office, The Office des Changes, has defined cryptocurrencies as "a hidden payment system not supported by any financial organization". Reiterating that all transactions related to foreign currencies must pass through the central bank, the Exchange Authority has warned that anyone using virtual currencies will face significant penalties In Algeria, it is illegal to invest or hold digital currencies. A financial law that is waiting to become law will punish cryptic investors "in accordance with the regulations in force." The bill shows the maximum disdain for bitcoin, calling it "the so-called virtual currency" that is not supported by anything physical, like banknotes. The general perspective in these three national jurisdictions is that the blockchain / criptovalute will struggle to achieve generalized acceptance and recognition.

Kenya
Several weeks have passed since the Kenyan parliament in July instructed the country's financial ministry to decide whether or not to regulate bitcoins and other criptovalute. There was no official communication from the Kenyan government in relation to its last position on the future of bitcoin. However, in April, the Central Bank of Kenya warned banks against companies involved in trading in virtual currencies or that the banks themselves invest in digital currencies. The central bank has reduced bitcoin to a pyramid scheme.

Under the veil of such warnings, the Kenyan authorities seem to be attracted to blockchain technology rather than cryptocurrencies. In March, President Uhuru Kenyatta set up a team of 11 members to investigate the technology of the distributed register, in particular it is a potential use in eliminating inaccuracies in the land register. The Kenyatta government in the past prevented bitcoin exchanges from making payments through Mpesa, a mobile money service offered by the cellular network provider Safaricom, which is 35% held by the government.

In the streets of Nairobi, bitcoin continues to thrive despite the shadow of uncertainty hanging over its future. Bancor Network, a fintech company based in the capital of Kenya, announced plans to launch a blockchain-based community network in June to help Africans manage their digital tokens, using part of the $ 150 million collected in a token sale last year

Single mandate

Uganda, Botswana
Notwithstanding the warnings of The Bank of Uganda against the use of unregulated currencies in the form of bitcoins and other digital coins, global Chinese exchange Binance has expanded into the country of Central Africa, one of the poorest on the continent. Coinpesa, the emerging Uganda digital currency exchange, launched its first 99 million token token sale on August 31. Ugandan President Yoweri Museveni spoke positively about the blockchain technology, but not about cryptocurrencies. He told the Africa Blockchain conference organized by the Blockchain Association of Uganda, in Kampala, in May, the need to "look for a new technology that allows things to move faster and new systems that accompany it".

The governor of the central bank Emmanuel Tumusiime-Mutebile had apparently spoken to the country in a previous speech at the same conference. Mutobile has accused the blockchain technology of lacking the support necessary to support a currency. But Ugandans, mostly professionals, have had a particular interest in virtual money. This is a place where bitcoin seems to thrive without hindrance, with Cabinet level support.

In Botswana, the government has paid little attention to digital currencies due to a very low level of bitcoin adoption. The Botswana Central Bank has not commented on cryptocurrencies or blockchains. At the time of writing this document, the exchange of cryptocurrencies that operated in Botswana was not known. Some operations take place on Whats App, Facebook and on the globalized exchange Localbitcoins.com. Others make use of South African exchanges such as Altcoin Trader, which accepts deposits directly from Botswana. Satoshicentre, a start-up blockchain from Gaborone, has now begun to conduct awareness campaigns on bitcoin mining and on the trade in cryptocurrencies. Two other start-ups, Plaas and Inside Studio Africa, are also experimenting with blockchain.

Namibia, Zimbabwe
Namibia officially banned the use of cryptocurrencies for commercial purposes in 2017. The Bank of Namibia did not specify any sanctions for violating the ban, but warned that "a local shop does not is authorized to evaluate or accept virtual currencies in exchange for goods and services ". He only said the Namibian dollar and the South African Rand remained legal tender in the country, but remained open to the possibilities offered by the blockchain technology. Although the cryptographic activities remain very limited in Namibia, the Bank's main concern was centered on violations of foreign exchange control and money creation issues, which he said was his only mandate.

Similar concerns seem to have been poured into neighboring Zimbabwe. In May, the Reserve Bank of Zimbabwe directed the banks to break off relations with the cryptocurrency trade, Golix and Styx24, in a de facto ban on digital money that was largely unexpected. In the past, the central bank had limited its warnings to cautious statements about the risk involved in trading virtual currencies. Golix, who at the beginning of this year released a bitcoin ATM that has since worked, is challenging the ban in Zimbabwe High Court. There were more than 50,000 people buying and selling cryptocurrencies on the Golix platform alone when the ban came into effect around May 11th. The drama of RBZ-Golix has developed around an economy that largely does not care about digital currencies, much less understands them.

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