Africa’s Bitcoin regulation is on right track, but there’s still long way to go

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Africa’s profile as a significant player in the digital currency industry has continued to grow in recent years. The continent is home to some of the countries that have shown the biggest appetite for Bitcoin, including Nigeria, Kenya, Ghana and South Africa. Despite the continued uptake, regulators have continued to fail the people. However, recent moves in some of the key nations give a glimpse of a bright future for Africa’s digital currency industry.

Nigeria’s Finance Ministry recently announced that it has been working with the Securities and Exchange Commission to formulate a regulatory framework for digital currencies. As CoinGeek reported, the Nigerian government revealed it sees great potential in blockchain technology.

Apart from the promise, the only tangible digital currency regulation in Africa’s largest economy was by the SEC in September. The securities watchdog revealed it had classified digital currencies as securities. This will give investors more protection and assurance, the regulator hopes.

While the promise of upcoming regulations signals a bright future for the Nigerian digital currency industry, it’s simply not enough. 

In South Africa, the Financial Sector Conduct Authority previously categorized digital currencies as financial instruments. I spoke to Angus Brown, the co-founder and CEO of Bitcoin SV wallet Centbee, who has been outspoken on the need for regulations. Angus was one of the panelists at a CoinGeek Live panel on the future of global compliance for Bitcoin businesses.

“The FSCA’s designation of crypto assets as financial instruments has been expected, as the regulators have been consulting diligently with the industry,” Angus told CoinGeek.

“The implication is that crypto businesses will need to register as ‘financial services providers’, and will need to meet the same standards as financial advisors and brokers. I support these moves, so long as they do not create an unnecessary or cumbersome barrier for ordinary people to buy or sell modest amounts of Bitcoin SV.”

The proposed rule will also require financial service firms to provide clients with objective information on digital currencies. This will help the clients to avoid the hype and rash speculation, Angus said.

In addition, the new rule will “open the door for clients to include Bitcoin SV in their asset portfolio,” he added. The FSCA will allow a transitionary arrangement, enabling digital currency firms like Centbee to continue serving clients as the rules get integrated.

Angus pointed out that businesses in the BSV ecosystem have continued to set the standard in abiding by regulations and working with the watchdogs.

“In my view the Bitcoin SV community continues to be the most aware of its long-term social obligations, building on a stable technical protocol, establishing standards for interoperability, and working with regulators to ensure compliance.”

He concluded, “Although we [BSV community] may not always like what our regulators require, unlike some in the digital currency community, we do respect their role.”

Watch the Centbee briefing by Lorien Gamaroff and Angus Brown at CoinGeek Live.