Business

Dennis Wafula

Crypto in Africa: changing the approach to crypto adoption

Africa’s crypto market has been one with a lot of promise. Since the beginning of this year, exciting activities have taken root all across the continent. However, many believe more needs to be done to help increase crypto adoption on the continent.

Changing tactics

In a land where financial services are scarce, cryptocurrency seems to be the long-awaited savior. Experts believe more could be done to help improve financial services, which could increase the level of crypto adoption.

Many communities across Africa and other developing countries have had to endure the high cost of sending and receiving money. According to The World Bank, the global average price of sending $200 in the first quarter of 2018 was 7.1 percent. This was more than twice the average cost of the 3 percent target set by the Sustainable Development Goals. Among the most affected regions in Sun-Saharan Africa where the remittance cost is at 9.4 percent.

Experts believe cryptocurrencies can be used to help the high number of unbanked people in Africa. As it is now, the number of Africans with access to banking services rose from 54 percent to 63 percent. 

To speed up crypto adoption more has to be done. Firstly, there is a dire need for crypto education. Educating the community on cryptocurrency will help bring more people to accepting cryptocurrencies. There are a few firms across the continent who have started works aimed at shinning more light on digital currencies. However, this is not enough, more individuals, governments, and institutions need to educate on the importance, nature and technical details of cryptocurrencies.

It has been more than a decade since bitcoin was launched and still, countries, not only in Africa but also in other parts across the globe know little on cryptocurrencies. Without education, setting up crypto ATMs, and businesses around the country will not help in the adoption of these currencies.

Another way to ensure quick adoption would be to build native crypto use cases. Government and institutions need to create crypto use cases that take into consideration the financial systems in the communities. By doing so, people will easily understand and relate to these technologies.

Improving crypto adoption in Ghana

Cryptocurrencies are still finding their place in many countries across Africa. In Ghana, crypto adoption has not been as quick as many would have hoped. There is little crypto activity compared to other countries like Kenya, South Africa, and Uganda.

Reportedly, Ghana has started works on creating crypto regulations. The government has been looking at how much cryptocurrency can affect its citizens. They have already received various reports of scams and other illegal activities in the community. For this reason, they have decided to regulate crypto activities in the country.

Last month, the Securities Exchange Commission (SEC) reported that it was considering regulating cryptocurrencies. The financial body also stated it was considering licensing crypto exchanges in the country.

According to the CEO of Modulus, Richard Gardner, the move by Ghana’s SEC to regulate the market is commendable since this will provide standard rules for exchanges to operate. Gardner believes that this will help make the industry viable. In addition this will protect consumers from exchanges that engage in market manipulation, money laundering and abusive trading.

Gardner also acknowledged that there is a need for both the public and private sectors to work together towards creating these regulations.

He stated:

“The best way to regulate an industry, especially one which is so technical, is to bring together those involved in the private sector, along with those from the public policy side. Together, we can usually find a way to encourage industry growth while protecting consumers.”

Some feel regulation will not be enough to control operations in the space. There have been calls for crypto education. Professionals believe that apart from that suggestion, communities need to get an education on various matters including laws, regulations and portfolio management.

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