Crypto in Africa: Rising interest in Bitcoin, banks pushing back

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Recently, South Africa’s reserve bank has heightened its anti-cryptocurrency regulations as a result of high volatility. Through a consultation paper, the bank said that more restrictions will be imposed on selling and buying of Bitcoin and other cryptos.

Ironically, the news has only increased interest from South Africans on digital currencies. This is per a Google data Trends report which indicated that the price of Bitcoin was most searched in South Africa and in Uganda over the last 30 days. In coming up with these stats, Google takes into account population density and country size. Having considered these, South Africa leads in the number of searches made for ‘the price of Bitcoin’ in Africa, followed by Uganda.

Despite the regulations, statistics from the World Payments Report indicate that developing countries are the key drivers of cryptocurrencies. The ecosystem and economic imbalance in Africa are seen as the biggest motivators behind the push for a crypto boom in Africa.

Despite the huge fascination, these increased crypto-activities have only been confined to the internet. Very few physical Bitcoin ATMs are in Africa. South Africa leads the pack with five while Uganda and Kenya have one each.

Traditional and government banks versus cryptocurrencies

Additionally, despite Africa’s promising economic potential, there have been limited forays into crypto-regulation. Government policies have tended to be strict and more restrictive than enabling. This has left ordinary citizens looking to go into cryptos at the mercy of traditional and central (government) Banks.

On one hand, traditional banks have over the years provided safe keeping for money as well as other banking services. In Nigeria for instance, even the smallest states such as Bayelsa State and Port Harcourt have a minimum of five existing commercial banks, with more than five thousand customers each. The situation is gradually changing with the advent and acceptance of cryptocurrencies. Many people are increasingly preferring to bank in digital currency on free-to-operate (including withdrawal and transaction fees) online wallets. For instance, Ugandans are slowly foregoing commercial banks for e-wallets.

On the other hand, government operated banks (central banks) have been the biggest opposers of cryptocurrencies. Entrepreneurial efforts in countries such as Ghana and Nigeria have been dealt great blows by the government seeing that they are not ready to be accepted.

Slow efforts are, however, being advanced for digital currencies in Africa. Senegal recently allocated land towards crypto efforts – the homegrown Akoin.