The African market for Blockchain and cryptocurrencies continues to boom especially in countries like Kenya, Nigeria and South Africa. Cryptocurrencies are known for their volatile nature, which possess as a big risk when it comes to trading or investing. The African renewal magazine by the United Nations, emphasizes that what possess as the biggest risk is the lack or poor regulation of cryptocurrency. According to the report, what is needed most in this market in Africa is regulation.
Central banks from African countries are issuing warnings to commercial banks and financial institutions to avoid any cryptocurrency related transactions. Despite these warnings, Africa has recorded tremendous growth in terms of Blockchain and cryptocurrency adoption. Countries like South Africa, Kenya and Nigeria continue to record large numbers of cryptocurrency activities either through trading or investing.
According to the Appsafrica report, the introduction of bans from central banks and governments, led to most African nations introducing mitigation measures with the aim to protect the consumers. However the population did not receive this information well as many decided to engage in cryptocurrency activities secretively without the visibility of the regulators.
Blanket bans would not be the solution to this disruptive technological innovation. But formulation of regulations will do the magic. With the right form of regulations, the government can be able to protect its investors. Regulation could help mitigate various issues that arise from Blockchain and cryptocurrency.
One major reason for the urgent need of regulations as mentioned above is the consumer protection factor. Consumers who are the traders and investors would be protected from price vitality and manipulation. Most investors are only familiar with very few cryptocurrencies yet there are thousands if not hundreds of these cryptocurrencies. Regulations could help provide reliable information on cryptocurrencies that would favor the interest of the traders and investors.
With the technological advances that happen from time to time, the consumers would be at danger of trading or investing in an outdated technology. Blockchain, just like any other technology has the potential of being outdated due to rapid technological advances. Professional advisers are required so as to provide investors with information concerning the technological risks of cryptocurrencies which would in turn help them make informed choices.
Money laundry is another form of risk that is associated with unregulated currency systems. Regulations can help to monitor the transactions and the location of an investor. This will help curb any form of infringement that can tamper with the investors’ activities.
Currently Kenya is experiencing a rapid eruption of companies factoring in Blockchain-based solutions, and considering bringing in the youth in this virtual currency market. Kenya experiences a rapid move into the technology world as most of its citizens have connectivity to the internet and are familiar with mobile money transfer. This could enable Kenya leapfrog and be East Africans leading cryptocurrency market in 2022. With the implementation of regulations and experts to educate the mass concerning cryptocurrency, Kenyans will embrace the new technology. Various cryptocurrencies are emerging and one that is on Kenya’s headlines is the World Causecoin. This is a new virtual currency that aims at redistributing the world’s wealth to the less privileged in society. The World Causecoin works hand in hand with non-profit organizations such as the Financially Fit for Africa.
The world Causecoin provide a venue on where people invest or trade, and on every transaction carried out a 2% is shipped down to a non-profit company such as Financially Fit for Africa which facilitates the transfer of aid to the haves-not. Regulations will help in monitoring and protect the interest of the people who are investing on the World Causecoin.
Regulations would help boost African remittances. According to World Bank, the total remittance in 2021 in the sub-Saharan Africa amounted to $45 billion. However Africa lacks reserves for foreign currencies. This is where cryptocurrency come in as they offer a means of handling transactions between borders. The decentralized networks of Blockchain enables transactions to be carried out with ease and eliminates the unreasonably high transaction fees involved in transactions.
