For the past few years, cryptocurrency slowly grew in popularity, reaching the far corners of the world—particularly impoverished nations and those that suffer from currencies with unstable fiat value. El Salvador is a prime example of this success—it’s the first in the world to make Bitcoin legal tender, and it’s not likely to be the last. The recent crypto boom has allowed the community to grow even further, peaking in mainstream interest and becoming a global sensation.
While many understand cryptocurrency only in the context of Bitcoin, the industry covers much more than just the mysterious coin that changed the digital financial economy in 2009. In particular, it’s blockchain technology that allows the peer-to-peer promise to come to life. And Africa, which has paid little attention to the shifting digital landscape, is finally starting to change gears. From Ethiopia in the east to South Africa and beyond, here’s how the continent is beginning to openly embrace cryptocurrency, blockchains, and related technology.
Ethiopia Meets Blockchain Technology
Ethiopia’s primarily rural landscape isn’t the first place that comes to mind when reimagining digital innovation. In fact, with only 15% of the population enjoying internet access, the predominantly online cryptocurrency economy hasn’t reached the wide majority of residents. However, the Ethiopian government recently announced a major turning point in technology use, particularly in the form of blockchain adoption through a deal with IOHK.
IOHK, a tech and engineering company founded by Jeremy Wood and Cardano founder Charles Hoskinson. It was built to maintain and build the Cardano platform but has since found other uses in the blockchain space. It’s now developing a code to bridge technology and education, which will ultimately result in a national database for student and teacher IDs and educational records in Ethiopia.
With over five million students, 750,000 teachers, and 3,500 schools, digital data management has been a pressing issue—but that problem is expected to be solved once the database launches before 2022. In conjunction with this digitised system, the government also closed a deal with a Chinese manufacturer, enabling them to distribute tablets to students. It’s a huge step toward bringing inclusiveness and online services to the country, which has been left a few years behind the digital wave.
South Africa Revises The Cryptocurrency National Policy
South Africa joined this year’s cryptocurrency race, bloating the local market’s daily trading volume to over $147 million. While the country has been actively trading coins for years, it was this year when popularity truly exploded, forcing the government to rethink the national policy concerning digital asset ownership.
In 2014, the National Treasury, South African Reserve Bank, and the financial regulation and intelligence sector released a statement about crypto, warning the public of the risks involved in the volatile market, but was relatively lenient with regard to the industry. In general, these authoritative bodies were tolerant of cryptocurrency and simply stated that there would be no government protection for any losses incurred in trading—but no bans or substantial regulations were put in place.
However, with an increasingly growing interest in digital assets, the negative sides of the once-in-a-lifetime investments are coming to light. The market is dense with assets that aren’t pegged to a stable fiat reserve; hence the speculative nature of their value, driven by interest and emotion. To combat the huge losses investors are swallowing from impulsive trading decisions, the government is rolling out phased regulations, which aim to stay up to date with international best practices, implement risk prevention measures, and increase digital financial literacy among consumers.
The regulatory framework will be rolled out by the Intergovernmental Fintech Working Group (IFWG), which has referred to decentralisation as a downside due to the lack of authority to solve issues such as sending coins to the wrong wallet address. They’re also concerned about the manipulative nature of the crypto market and the prevalence of Ponzi schemes, following the scandal surrounding Mirror Trading International’s theft of over 23,000 BTC—valued at $1 billion at the time.
What About The Rest of Africa?
While progress is evident in some parts of the continent, not all countries are on the same page regarding cryptocurrency acceptance. Digital asset literacy remains a huge issue, but sites like The Top Coins share relevant and factual information to close the knowledge gap concerning cryptocurrency, which still lingers despite its recent popularity. However, with the little steps from Ethiopia and South Africa, the rest of the continent is watching closely and may follow suit in the near future.