Cryptocurrency: Regulators in Africa Doing ‘Wait and See’ – Ecobank

• Cryptocurrency: Regulators in Africa Doing ‘Wait and See’ – Ecobank

African regulators are unsure how to regulate booming cryptocurrency market, despite the need to regulate the fast-growing investment vehicle in the continent.

According to a recent report published by Ecobank, African governments and regulators recognise both the benefits and risks of cryptocurrencies, however, they have been reticent in approving cryptocurrency transactions.

“African countries appear to be looking to their neighbours to regulate and innovate first, and learn from their mistakes, rather than being the first mover,” the report stated.

This may not be unconnected to the scary volatility associated with the highly speculative assets. In January 2017, the total market capitalisation of all cryptocurrencies stood at about US$20 billion but surged to over US$800 billion by January 2018 — a 4,000 percent gain in just 12 months.

Since the gain, the unregulated market has slumped to US$215 billion despite the number of new cryptocurrencies rising from 600 in January 2017 to over 1,500 a year later and 24-hour traded volume jumping from US$200 million it traded a year ago to US$70 billion in January 2018 during the peak period.

The spectacular rise and fall in the traded value has subdued the broader discussion of the benefits of blockchain technology. Hence, the reason it was banned in Namibia.

In Africa “Although cryptocurrencies are generally not prohibited, consumers use them at their own risk and they have been warned about the potential consequences by regulators.”

However, the report asserted that South Africa and Swaziland offers two of the most favourable stances in Africa.