Business 7 September 2018Dennis Wafula
Crypto in Africa: Binance eyes African market despite East African central bank’s crypto warnings
Africa has seen bigwigs entering the region to invest in its domestic cryptocurrency market over the last couple of months. Both local and international crypto institutions have been eyeing Africa’s cryptocurrency market and a recent study conducted by Paxful show that Africa has great potential for becoming a leading continent in the cryptocurrency industry.
Bincance plans to invest in Africa
Binance has decided to tap into the vast cryptocurrency potential in Africa. In a statement, the company said it is looking to make investments in Africa and is calling on its supporters to help them connect with crypto-and blockchain projects in the continent with “excellent founders.”
“We have no headquarters, no office and no geographical boundaries. We are just as African as we are Asian or European. The blockchain revolution will be a global one and Binance Labs will consider investments in all non-sanctioned countries. In Africa, we feel very much at home and we want to deploy our capital there,” according to Benjamin Rameau, director at Binance Labs.
The company is looking to invest in Africa as it believes the continent will help maximize its profits. Binance believes Africa is on the verge of turning the tables on crypto and it wants to be part of the movement. Africa could soon overtake Asia as the world crypto leader, according to Binance.
There are various factors to support this belief, Binance noted. First, unlike developed countries, Africa is more open to change. Studies show developed economic systems are reluctant in allowing new systems into their space, which can threaten their profits. Entrenched banking industries have been fighting cryptocurrency adoption all across the globe and more so in the developed economies. Most of the communities in Africa still do not have proper banking frameworks so blockchain and its technology will face minimal opposition, making it easier to introduce this technology to the communities.
Secondly, Africa has a large young population who is willing to embrace the new technology. This puts them at an advantage over the most developed economy. According to reports, Africa’s young population will provide the labor to facilitate various projects.
Binance’s investment project will see an increase in job opportunities for the community, general economic growth, increase infrastructure and better financial systems for the communities.
East Africa’s central bank urges caution with crypto, blockchain
The Pan African bank, Ecobank, released a report in August that showed how different countries on the continent have reacted to cryptocurrencies.
The bank cautioned governments in the East African community to be careful and do proper research on how best to handle these new technologies. The report covered five countries in East Africa, namely: Kenya, Ethiopia, Tanzania, Rwanda, and Uganda.
According to the report, Kenya currently ranks as the third highest, following South Africa and Nigeria in terms cryptocurrency transactions. The cryptocurrency community in the country grows by the day, despite earlier warnings by the Central Bank following the case between Safaricom and BitPesa, a blockchain-based startup. The Central bank of Kenya warned the public from investing in cryptocurrencies, stating that they were unregulated currencies making them illegal.
Authorities in the country have an open mind toward this technology. In July, the Kenya Parliament tasked Henry Rotich, the Treasury Secretary, with the responsibility of deciding whether cryptocurrencies would become legal tender. The Kenyan government has also put together a task force on blockchain and AI which comprises of eleven members.
The second country on the report is Rwanda. Rwanda, though not as active as Kenya, is slowly adopting cryptocurrency trade. A report published in 2017 by two senior economist at Rwanda’s Central Bank indicate that the cryptocurrency community is slowly growing and will soon be a major thing in the country. However, officials have not yet taken a position in regards to the matter.
Tanzania is quickly warming up to cryptocurrencies. According to the report, the cryptocurrency community has greatly grown with more people transacting in the cryptocurrencies. However, the central bank, the bank of Tanzania (BoT), has published notices warning the public not to invest in these currencies. According to the Governor of the Bank of Tanzania, Benno Ndula, cryptocurrencies are not regulated and are risky to invest in. He stated that the central bank is currently discussing whether to accept or ban the trade in the country. Authorities will soon give directives on the use of cryptocurrencies in the country.
Ethiopia, like Tanzania, does not have a big cryptocurrency community. However, there is great potential for growth, as more young people in the country are embracing this new technology.
The final country on the report was Uganda. In the last couple of months, Uganda has had an increase in cryptocurrency activities to a point of attracting big names like Binance. Despite the government not taking a stand on crypto, the country is quickly adopting cryptocurrencies. The central bank in Uganda warned the public last year to stay away from cryptocurrencies; however, this doesn’t seem to affect cryptocurrency growth in Africa.
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.
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