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Source: Сointеlеgrаph

The International Monetary Fund (IMF) is calling for increased regulation of African crypto markets, one of the fastest growing markets in the world, according to a blog post from the global institution on Nov. 22.

Among the reasons why countries in the region should adopt regulation, the Monetary Fund cited the FTX crash and its ripple effect on crypto prices, which “sparks new calls for increased consumer protection and regulation of the crypto industry.”

Moreover, the authors argue that “the risks from crypto assets are clear” and “it’s time to regulate” to strike a balance between minimizing risk and maximizing innovation. Based on the Regional Economic Outlook for Sub-Saharan Africa October 2022, the article states that “the risks are much higher if cryptocurrency is accepted as legal tender”, which poses a threat to public finances if governments do. cryptocurrency as a means of payment.

The publication also noted:

“Politicians are also concerned that cryptocurrencies could be used to illegally transfer funds out of the region and to circumvent local regulations in order to prevent capital flight. The widespread use of cryptocurrencies could also undermine the effectiveness of monetary policy, creating risks to financial and macroeconomic stability.”

According to the IMF, 25% of countries in sub-Saharan Africa formally regulate cryptocurrencies, and two-thirds have introduced some restrictions. On the other hand, Cameroon, Ethiopia, Lesotho, Sierra Leone, Tanzania, and the Republic of the Congo have already banned crypto assets, accounting for 20% of Sub-Saharan Africa. Kenya, Nigeria and South Africa have the largest number of users in the region.

Between July 2020 and June 2021, Africa’s crypto market gained more than 1,200% in value, with Kenya, South Africa, Nigeria, and Tanzania gaining momentum, according to Chainalysis.

Ghana is testing a central bank digital currency (CBDC), reports. According to Kwame Oppong, chief executive of the Bank of Ghana, the country’s initiative is aimed at expanding access to financial services. Ghana has the potential to reach cryptocurrency adoption levels similar to Kenya and Nigeria, countries that ranked 11th and 19th in the Chainalysis Global Cryptocurrency Adoption Index.

Source: Сointеlеgrаph

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