African governments and central banks are mostly adopting a ‘wait and see’ approach when it comes to regulating cryptocurrencies, Ecobank’s “Middle Africa Briefing Note” report says.
The report that analyses cryptocurrency regulation in Sub-Saharan Africa states that many governments are concerned that the anonymity of digital currencies facilitates money laundering and unwanted outward flows of capital.
“Many African governments and regulators recognise both the risks and the potential positive impacts of cryptocurrencies, and some also appreciate the difference between cryptocurrencies and the underlying blockchain technology,” the report says. “But they have been reticent in authorising cryptocurrency transactions, and mostly remain apprehensive about the potential risks.”
“African countries appear to be looking to their neighbours to regulate and innovate first and learn from their mistakes, rather than being the first mover.”
Of the 39 African countries analysed in the Ecobank report, 21 have no public stance on the cryptocurrencies.
Namibia is the only country that has banned the cryptocurrency outright stating that virtual currencies are neither issued nor guaranteed by a central bank nor backed by any commodity
Nine of the Sub Sahara African countries are taking contentious stance whilst six still making research on the cryptocurrency. Only South Africa and Swaziland have been favourable to the cryptocurrency.
Those countries that have made a statement have indicated that cryptocurrencies operate in the grey area between legality and illegality according to Ecobank.
Zimbabwe’s central bank ban on cryptocurrency was lifted by the High Court after virtual traders contest.
The ban is however temporary as the case against the Reserve Bank of Zimbabwe‘s decision filed in May is still in courts with major decisions likely to be made after the next government has been selected