Business 31 May 2018Dennis Wafula
Crypto in Africa: Continent opens doors to cryptocurrency adoption
Cryptocurrencies will soon be the order of the day in Africa as locals slowly warm up to the idea of a digital world. There has been an increase in cryptocurrency transactions in the continent in the last couple of months, while investments in the sector have also increased with more crypto-related startups coming up.
Africa embraces cryptocurrency
Recent reports put Africa at the top in Paxful’s cryptocurrency transaction list. According to Paxful, a global peer-to-peer cryptocurrency marketplace, a majority of transactions made on its platform are from African countries. Records show that over R500 million (about US$40 million) transacted on the platform originated from Africa.
Particularly, the young people below the age of 30 have embraced digital currency, according to Paxful. Paxful co-founder and CEO Ray Youssef said the continent shows great potential to become a leader in peer-to-peer financial matters. Interest in peer-to-peer technology grows every day especially in Kenya, Nigeria, South Africa, and Ghana. This could lead to the technology taking over various sectors, such as mobile banking.
mCoin, a cryptocurrency that works on any mobile platform, is set to help African countries expedite the uptake. The company announced it is planning to partner with African governments to launch a virtual SMS wallet.
The new technology will allow individuals access the virtual wallet and also interact with other people through its SMS interface. To get the virtual wallet, clients will have to join mCoin’s Airdrop Program where they get registered and earn free mCoin.
South Africa’s Sygnia joins the cryptocurrency market
Cryptocurrency businesses in South Africa have grown tremendously in the recent months with many businesses looking to join the industry. The latest move came from an investment management company, Sygnia Asset Management, based in Johannesburg. The company is planning to launch a cryptocurrency exchange, Sygniacoin, in the last quarter of 2018. According to reports, the firm has been working on the idea for the last six months.
The firm is planning to operate its cryptocurrency exchange in accordance to the principles laid down by the New York’s legislative bodies in regards to virtual currencies. Sygnia also announced that it would be launching a Sygnia cryptocurrency fund in the future.
Studies show that more than 60% of South Africa’s population have ventured into cryptocurrency markets with the remaining figures expected to join the markets in the near future. Guided by the increase cryptocurrency activities, the regulators have put various measures in place to regulate the market. However, industry stakeholders have called for more actions to be taken to ensure safe trading environments rather than focusing on control.
South African investors lose $80M in crypto scam
Many investors in South Africa have fallen victim to a scam concocted by a cryptocurrency company called BTC Global. The company, launched in 2017 by Stephen Twain, duped investors a total of 1 billion Rand (about US$80 million), according to reports.
BTC Global promised clients that they would receive 2% daily, 14% weekly and 50% monthly returns, and according to investigators, early bird investors in the scheme got their returns according to the agreement. However, the payments suddenly stopped and efforts to contact BTC Global team bore no fruit.
Scams and Ponzi schemes across Africa have contributed to the increased skepticism on the digital currencies among investors. Despite warnings and calls for diligence, many were still victimized by scams. A few weeks ago, investors lost their money after a crypto company in Nigeria went under. The company managed to collect millions from investors promising to give 30% weekly returns.
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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