Business 8 February 2019Dennis Wafula
Crypto in Africa: Kenya’s new platform and South Africa new crypto laws
The year has been favorable for the crypto community in Africa. Recent reports by Paxful show that Africa is quickly catching up on blockchain and cryptocurrency matters. There has also been a significant increase in crypto adoption across the country.
Kenya gets a new crypto platform
Investors and other important players observing the crypto market in Africa are now looking at Kenya. Barely a month after the recent prediction, Sungroowmall, a decentralized online store is looking to expand into Kenya.
Reportedly, Sungroowmall is the first largest decentralized web 3.0 cryptocurrency marketplace in Africa and globally. The platform allows users to buy and sell items using cryptocurrency. The platform has been functional in Nigeria collecting a large number of users and is now looking at the Kenyan market.
While commentating on the matter to BitcoinKE, Sungroowmall stated:
“We are pleased to inform you that we would like to extend our wings to Kenya. We envision mainstream adoption of cryptocurrency across Africa, and we seek more merchants to join our marketplace in Kenya.”
The online store allows users to find trade opportunities, find partnerships and promote their businesses. Users can buy and sell as many products as they want without any restriction. People can buy different items including laptops, wristwatches, phones, hair product and so much more. So far, the platform is only accepting one cryptocurrency, Bitcoin Core (BTC) as payment.
In the coming days, users in Kenya will be able to access this platform and connect with over 50 million traders and buyers in Nigeria’s crypto market and other markets across the globe.
Last year in August, Kenya was ranked at number 3 in crypto trading volumes in Africa. On the global scale, the country ranked at number 23. Most crypto users were found within the capital city, Nairobi with other towns like Nakuru, Mombasa, Meru, and Eldoret having few crypto activities.
South Africa makes changes to crypto laws
The South African President Cyril Ramaphosa recently signed the Taxation Laws Amendment Act. The new act is an update to the existing crypto laws in the country
Reportedly, in the new taxation act, crypto assets, which include security tokens, are no longer classified as currencies but as “Financial instruments.” For crypto taxpayers, this means that losses cannot be written off against profits made on other activities generating income.
A consultation paper on Policy Proposal for cryptocurrency assets followed the new act. The Crypto Assets Working Group released the consultation paper last month. The paper explains the need for regulations that can be adjusted as the crypto market continues to unfold.
Authorities combined research on the paper to “develop a regulatory policy response to deal with cryptocurrency’s potential impact on [South Africa’s] financial sector, provide greater clarity for regulators, address identifiable risks, and respond to the nation’s growing interest in participating and investing in the crypto space.”
South Africa has been taking steps to ensure its growth and control of its cryptocurrency market. Changes in regulations are aimed at welcoming new investors into their market. Some experts explain that there might be increased interest in security tokens in the country, which might result in the transformation of South African crypto market. As it is, there is little activity around security tokens in the country.
Some individuals, however, are not too happy with these changes. Rob Hare, a senior associate at the law firm Bowmans, said about the new tax laws, “The supposedly small change of categorizing cryptocurrency as a financial instrument is an unnecessary step in the wrong direction.”
Authorities in the country have always been clear about their stand on cryptocurrency. Like many countries, authorities in South Africa were highly against these new digital assets but eventually warmed up to them. Recently, South Africa’s president, Cyril Ramaphosa presented a manifesto to the public promising to support blockchain and cryptocurrencies if elected to power.
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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