While the rest of the world bemoans the ever-decreasing value of Bitcoin, African nations are embracing blockchain technology and developing a host of new cryptocurrency projects.
South Africa is leading the charge, with the South African Reserve Bank testing implementations of blockchain technology as a wholesale payment solution. They even went as far as to give cryptocurrency its own unique name in the country, cyber-tokens. In May this year the first ever cryptocurrency ATM opened in the country’s financial hub Johannesburg, allowing the withdrawal and exchange of crypto and fiat currencies.
Kenya has been at the forefront of a number of recent blockchain projects, with the EOS Nairobi organization launching in its capital earlier this year. The organization aims to grow interest in blockchain technology in the country and is currently involved a number of projects in the health, government and art industries. Bankex recently announced the launch of a fund-raising system utilizing blockchain technology to bring clean drinking water to Kenyans in rural villages. They hope to see the project expand across Africa.
Informal Employment Sector Driving Adoption
The huge scale of informal employment across Africa is a big driving factor in the adoption of blockchain technology. The International Labour Organization reports as much as 66% of all workers in the continent are in the informal sector, with the majority being young people. Despite this, Africa has some of the largest growing markets in the world and fintech companies are looking to countries like Sierra Leone to establish regulatory sandboxes that promote innovation in the industry.
Use of cryptocurrency as an alternative to fiat is hugely popular in countries with dire economies, such as Zimbabwe. Despite the popularity of digital assets in the country and the recent installation of crypto ATM’s by local exchange Golix, the Reserve Bank of Zimbabwe has attempted to ban cryptocurrencies. Fortunately, public outcry and a series of ongoing lawsuits may see the ban overturned.
Nigeria is another country with a huge interest in crypto assets, with trading of Bitcoin in January this year reaching almost $4 million per week. Ghana has even seen the launch of its very own cryptocurrency, Finchcoin, by a local fintech startup.
With all this interest, pressure is being applied on governments and policymakers to address regulations required to address risks associated with blockchain and cryptocurrency. Concerns such as terrorist financing, tax evasion and money laundering are top priorities for authorities to address before the cryptocurrency market gets hijacked by criminals.
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