The emergence of cryptocurrency in our modern time has provided us amongst other benefits the needed economic flexibility in handling transactions across different financial markets and time zones. Even though the same can’t be said of the African market which is known for its slow growth in the areas of infrastructures, innovations, and technology.
Fear of losing its Grip
There is no need to be surprised if the continent still hasn’t caught up with the cryptocurrency wave. Such is to be expected from a continent whose regulators are so careful to not allow anything at all to tamper with their control of the market let alone a virtual currency. They hold a very tight fist over the market. Cryptocurrency is seen as breaking the ranks, something the regulators aren’t in support of.
Initially, lots of financial powerhouses in Africa seem to detest the virtual currency. They countered it with regulations that made trading in such currency an illegal transaction. Even though their stance on this is still being reviewed; at least that’s what they said. I am wondering if they will be able to let go of their dictatorship in the financial sphere.
The Central Bank of Nigeria in a statement affirmed that the;
“Central bank cannot control or regulate bitcoin. The Central Bank cannot control or regulate blockchain. Just the same way no one is going to control or regulate the internet. We don’t own it.”
That is so true. I’m just more concerned about how fast they will act on this because as of today 19/12/2017, cryptocurrency trading in Nigeria is illegal.
The Financial powerhouse in Swaziland is trying to carefully tread the cryptocurrency path, even though they are simply scared of relinquishing their control hence warning their citizen to be cautious about their transactions.
Bank of Namibia at the moment is yet to regulate virtual currency transactions and also warning individuals engaging in the trade to be careful. The Bank of Uganda went as far as saying;
“whoever wishes to invest their hard earned savings in cryptocurrency forms such as One-coin, Bitcoin, Ripple, Peercoin, Namecoin, Dogecoin, Litecoin, Bytecoin, Primecoin, Blackcoin or any other forms of Digital Currency is taking a risk in the financial space where there is neither investor protection nor regulatory purview.”
Surprised? Not really.
These regulators do have a lot in common. They don’t trust and are not ready to regulate virtual currency trading. Their claim is that they are protecting their citizens when all they do is trying to criminalize their path to financial independence by making the trading of virtual currencies illegal in their various countries.
They know that traditional financial services will suffer a lot. Not if but when – the moment they decide to regulate and legally adopt cryptocurrency into their various markets. And that’s something they want to avoid by all means necessary. They know pretty well that won’t be able to control people’s wealth any longer, it intangible. Right there! You got them by the wrist.
Consider China, on the other hand, it had concerns about the virtual currency trading which prompted the September ban rolled out against every cryptocurrency transaction in the People’s Republic. This ban was as a result of “disrupted economic and financial order”, a supposed description of the cryptocurrency effect. It is China, the control freak so, it is quite understandable.
In any economy, the effect of cryptocurrency will always be enormous, however, individual government and financial regulators do have a lot to do in overseeing the virtual currency market. Africa, on the other hand, is lagging in the areas of infrastructures and technology which partly explains the reluctance of its regulators in their acceptance of the virtual currency.
Africa is regarded as an “emerging market”; that is true. And as an emerging market, there will be lots of tension and doubt as to the impact the virtual currency might cause hence the difficulties in its adoption into the African economies. Africa has a long way to go in capacity building, for it to be able to absorb not just the cryptocurrency wave, but future innovations and technology.
Cryptocurrency offers huge opportunities to its massive users. Apart from the intrinsic benefits attached to possessing virtual currency as highlighted above, it also is being used to provide financial solutions which the traditional financial systems are well known for. Despite the hostility towards the use of cryptocurrency in Africa, there has been an increased interest from within the borders of the continent.
An estimated $3.2 million worth of trade per week is being recorded on Nigeria’s Peer-to-Peer marketplace. South Africa records an estimate of $2.5 million. Morocco records $211,860 and Kenya recorded $649,900. These figures are bound to increase as time goes, on even with the ban laid by the individual government.
Africa has a long way to go in capacity building, for it to be able to absorb not just the cryptocurrency wave, but future innovations and technology.Godlymartins Olayemi
The Truth behind the Resistance
This heightened interest in cryptocurrency was initially based on the continual value increase of the virtual currency, and as time went by, the authenticity, acceptability, and its untraceable attribute increased the worth of the virtual currency. It now is becoming an integral part of some economies and financial markets even though some still find the idea of cryptocurrency outrageous.
It is true that traditional financial systems are isolated from the loop. Also, the usage of these currencies tend to permit and increases various acts deemed as criminal offenses in various countries around the world. The latter is true even in the traditional banking system so there really are not enough excuses to justify the regulators’ claim.
This was first published (19/12/2017) on The MarketMogul now called MogulNews as a contributor post. It has also being edited without tampering with the content.