A report analyzing cryptocurrency regulation in Sub-Saharan Africa has found that despite cryptocurrencies exerting a notable presence in 36 African countries, only South Africa and Swaziland have adopted "a generally favorable and permissive [regulatory] stance" pertaining to cryptocurrencies.
African governments and central banks are mostly adopting a "wait and see" approach when it comes to regulating cryptocurrencies, says the report published by the pan-African bank, Ecobank Transnational Inc.
Many African governments and regulators recognize both the risks and the potential positive impacts of cryptocurrencies, 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," according to the report.
Only Namibia has banned cryptocurrencies so far. In contrast, neighbouring South Africa and nearby Swaziland offer two of the most favourable regulatory stances in the continent. But with the exceptions of Cameroon, Rwanda and Senegal, no other Francophone government or central bank has made a policy statement on virtual currencies.
South African regulators are relatively progressive on cryptocurrencies. In 2014, the South African Reserve Bank released a position paper on virtual currencies which looked promising for the industry.
The South African government began working with blockchain company, Bankymoon in July 2017, to create a "balanced" approach to bitcoin regulation.
In mid-2017, the South African Reserve Bank, the country's central bank, indicated that they are trialling cryptocurrency regulations, with a view to potentially recognizing digital currencies as a form of legal tender.
Alongside, the revenue arm of the South African government is exploring ways in which cryptocurrency transactions and investments can be appropriately taxed.
In April this year, the South African Revenue Service announced that citizens must declare cryptocurrency-related taxable income as part of their capital gains statement.
Speaking at an economic forum in October 2017, Central Bank of Swaziland (CBS) chief Majozi Sithole issued a positive in terms of the country's recognition of the potential of cryptocurrencies. "It may not be wise to dismiss virtual currencies and as the CBS we are learning and we want to accept and support innovation. If this is innovation, we do not want to stifle it. We want to learn more about it," he told the conference.
For comments and feedback contact: editorial@rttnews.com
Business News