Introduction
The government of Africa has been a bit slow with the adoption of cryptocurrencies. Maybe it is due to the reasons like good attentions of protecting their people or having a crop of old leaders who have not to envision a future without paper cash, Africa is now slowly picking up the pace towards the era of Cryptocurrency.
The majority of the younger generation of the popular countries of Africa, like Nigeria, Kenya, Egypt, and South Africa, is investing their time in the Bitcoin Technology, disregarding the regulation skepticism on the continent.
The Central Bank of Nigeria has kept itself away from the Bitcoin movements twice and even warned the citizens that bitcoin investments had no legal intention. Furthermore, there seem to be no crypto exchanges established in Botswana. Bitcoin trading is also restricted to private Facebook and Whatsapp groups. The Bank of Gana also announced that use and trading Cryptocurrency is illegal yet or it is not considered as a lawful form of currency in the country. However, the Governor of the Bank of Ghana has issued Payment Systems and Services Bill, which will enable the regulation of Cryptocurrency in the future.
Nonetheless, the trading of Bitcoin is quite booming in Nigeria. Many people believe that this boom in Bitcoin trading is brought by a busted online Ponzi scheme, named MMM scheme. This scheme brought trading into the mainstream with a lot of ease.
The Central Bank of Nigeria first reacted to virtual currencies in January 2017 and warned the citizens to handle cryptocurrencies at their own risks. Some of the people misunderstood the warning as a ban, but officials of the Bank have since declared that they cannot put a full stop on the usage of Bitcoin because it is quite evident that they are not within their control.
South Africa, Ghana, and Nigeria are amongst those countries that have managed to count amongst the top 10 ranked names for Bitcoin technology across the globe.
In the following section, we have discussed the Cryptocurrency regulation outlook in these African countries along with a few others. Let’s get started!
South Africa
The government in South Africa is less strict regarding the trading of the Bitcoin. The South African Revenue Services has been discovering many ways in which Cryptocurrency investments can be appropriately taxed. In April 2018, SARS (South African Revenue Services) stated that the citizens of South Africa should reveal their income derived from Cryptocurrency investments as an integral part of their capital profit statement.
SARS also argued that cryptocurrencies must be taxed based on the intention with which they are being held. Therefore, profits and losses regarding cryptocurrencies can be widely categorized as having three major outcomes that are mentioned as follows:
Investors trading cryptocurrencies on exchanges will be liable for the capital profits earned during investments.
A Cryptocurrency can be obtained via mining but until the newly obtained Cryptocurrency is exchanged or sold for cash, it will be managed by the miner as trading stock.
The normal barter transaction regulations will apply where services are exchanged for cryptocurrencies.
In 2017, The South Africa Reserve Bank (SARB) has launched a project (Project Khokha) to discover Blockchain – the distributed ledger technology. During early 2018, the bank finished a 14-week proof-of-concept on the blockchain. This managed to settle everyday 70,000 payment transactions of the country within 2 hours while taking an average of 1 to 2 seconds of every transaction.
Ghana
In January 2018, the Bank of Ghana declared that buying and selling Bitcoin in the Country is not yet lawful as it isn’t a recognized lawful tender. The BOG also wants to notify the citizens that these activities in digital currency are licensed currently under the Payments System Act 2003. Currently, the Bank is investing a lot of resources to modify further the settlements and payments system, including e-form of money and to launch cybersecurity guidelines to protect online financial transactions.
In this country, more than 80 percent of landlords lack official title deeds with Ghana’s Land of Commission and most of the land is being held via verbal agreements. In order to solve this issue, start-up Bitland of Ghana is making use of blockchain technology to mirror official title deeds, elevating the integrity of the land records that are held by the Land Commission of Ghana.
Kenya
Digital currencies remain booming in Kenya. The law of Kenya does not have a regulatory framework for a blockchain. However, the National Land Commission of Kenya has welcomed the idea of blockchain network usage in creating transparency of land ownership, since it will boost fraudulent sales of land and blur over the title to land.
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