Is Cryptocurrency Legal in Africa?

Is Cryptocurrency Legal in Africa?

According to coin.dance there are currently no restrictions on bitcoin or other cryptocurrencies in 105 countries around the world. Cryptocurrencies have also made their presence felt in Africa, with authorities in several countries already taking steps to regulate or outlaw digital assets. Here is a quick look at the status of digital currencies in key African markets.

Botswana

There is an active cryptocurrency community in Botswana, with most trading taking place on informal WhatsApp and Facebook groups. Currently, there is no cryptocurrency exchange in the country and there appears to be no intention to monitor the industry by the Bank of Botswana. Several blockchain related startups have sprouted up in a bid to solve various problems and also to raise awareness of digital assets in the country.

Egypt

Bitcoin and other cryptocurrencies in Egypt are currently not recognized as legal tender and cannot be traded, but there is some confusion over its legality as a whole. According to the Grand Mufti of Egypt, cryptocurrency trading is not allowed under Islamic religious law due to the risk it poses. These comments were part of a fatwa, which is not legally binding, but often represents a high level legal opinion in the country, resulting in the confusion surrounding digital assets.

Ghana

The country’s central bank does not recognise bitcoin and other cryptocurrencies as legal tender, citing a lack of legal infrastructure to regulate and such activities and transactions. However, it has suggested that it may be interested in blockchain technology to upgrade its payment and settlement systems.

Kenya

The Central Bank of Kenya has stated that cryptocurrencies are not recognized as legal tender in the country, and are not regulated as well. However, it has not outlawed the trading of digital assets and people are free to buy and sell on crypto exchanges at their own risk. The first crypto ATM in Kenya has also recently been set up in Nairobi, accepting US dollars and Kenyan shillings in exchange for bitcoin and litecoin.

Morocco

Bitcoin and other cryptocurrencies are banned and not recognized as legal tender in Morocco. Bank Al-Maghrib, the country’s central bank, has also warned the general public not to perform transactions with digital assets, citing penalties and punishments set out by existing laws. All foreign payments must go through sanctioned intermediaries and be approved by the central bank.

Nigeria

Like many other countries around the world, the legal status of cryptocurrencies in Nigeria is currently ambiguous. The Central Bank of Nigeria has cautioned investors to be wary of cryptocurrency as it is under their regulation, but has not issued any statements that outlaw its usage. There is a healthy awareness of cryptocurrency and an active community in the country, with leading bitcoin exchange NairaEx processing over 1 billion naira worth of transactions each month as of November 2017.

South Africa

Although the government of South Africa does not recognise cryptocurrency as legal tender, there have been encouraging signs that it is ready to embrace blockchain technology. South Africans also have easy access to bitcoin and ethereum, with leading cryptocurrency exchange Luno offering pairs with the rand.

Uganda

The legal status of cryptocurrencies in Uganda is currently ambiguous, but the Bank of Uganda has warned that digital assets are not regulated. It recommends that people should “do business transactions with only licensed financial institutions”, but there is currently a thriving cryptocurrency community and awareness is growing fast.

Zimbabwe

Earlier this year, the Reserve Bank of Zimbabwe (RBZ) banned the trading of cryptocurrencies through banking services. Its governor reiterated that digital assets like bitcoin and litecoin “do not have legal tender status”, with the industry unregulated in the country. However, the Zimbabwe High Court overturned the ban after local exchange Golix challenged the ruling, with the RBZ failing to show up for the hearing. As of now, cryptocurrencies remain in a legal grey area, much like the rest of the world.

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