Cryptocurrencies gained popularity in Africa. Nevertheless, crypto’s popularity attracted the attention of regulators.
For example, South African regulators proposed regulations that would impose strict licensing as well as monitoring requirements, without recognizing cryptocurrency assets as legal tender.
Regulators in another African country also would like to regulate crypto. Recently, Nigeria’s Securities and Exchange Commission (SEC) proposed guidelines that would treat all cryptocurrency assets like securities by default.
People should take into account that, regulations are important, as it would be harder to develop the crypto industry without them. Nevertheless, regulators in various countries should work with crypto-related companies and enthusiasts to come up with the best solution.
African countries and crypto adoption
As mentioned above, African countries have the potential to develop the crypto industry. Importantly, two African nations are among the top eight countries of the Chainalysis crypto adoption index.
Nevertheless, heavy-handed oversight could create problems for the local crypto industry.
Nigeria is the main driving force, as the country has the best result in 2020, with the weekly P2P volumes of $5 million to $10 million. Furthermore, Kenya and South Africa also reached great results, with between $1 million and $2 million a week each.
Interestingly, Africa is the strongest growing region in 2020 for the P2P exchange Paxful. Furthermore, centralized exchanges also reported a spike in trade activity.
For instance, Luno reported $549 million worth of combined volume from Nigerian and South African customers in August. Consequently, compared to the start of 2020, this number increased by 49%.
Also, the number of new customers rose by 122% from the fourth quarter of 2019 until the second quarter of 2020.
It is worth mentioning that, crypto became popular in Africa partially due to the notoriously exclusive local banking sector. Notably, crypto-assets gained popularity among Africa’s large community of workers who live abroad