Several African countries are warming to the idea of adopting cryptocurrencies
While the cryptocurrency is gaining traction with users around the world, many governments are still considering whether it should be legalized. However, countries in Africa are warming to the idea of a digital currency, as the Central African Republic adopted bitcoin as the official currency late last month. With this, it became the second country in the world and the first in Africa to do so. The only other country to use bitcoin as legal tender is El Salvador. After the Central African Republic, Uganda is also now considering the idea of a “central bank digital currency”, pointing to the ever-increasing interest in cryptocurrencies in the continent.
Speaking about Uganda’s interest in cryptocurrencies, Bank of Uganda National Payments Director Andrew Kawere explained Reuters That the Bank of Uganda was conducting preliminary research to determine whether a central bank digital currency should be explored, and what policy goals it would address.
While Uganda is still working on the idea, Nigeria’s central bank last year barred local banks from working with cryptocurrencies. “In addition to the earlier regulatory directives on this subject, the Bank would like to remind institutions regulated by it that dealing in cryptocurrencies or facilitating payments to cryptocurrency exchanges is prohibited,” a Command The Central Bank of Nigeria said in February 2021.
Instead, it launched its own digital currency. In October 2021, Nigeria became the first country in Africa to introduce a digital currency called eNaira. Speaking about the same, Nigerian President Muhammadu Buhari had said said In a televised speech that over the next 10 years, the adoption of a central bank digital currency and its underlying blockchain technology could increase Nigeria’s GDP by $29 billion.
The data also points to a growing interest in cryptocurrencies in African countries. According to a report by Blockchain Data Platform ChainalysisAfrica’s cryptocurrency market grew by more than 1,200 percent in a year between 2020 and 2021. The report states that although Africa had a small crypto economy, $105.6 billion worth of cryptocurrencies were received between July 2020 and June 2021, it was also “one of these.” Most dynamic and exciting”.
Additionally, the report also noted that Africa sees some of the highest grassroots adoption in the world, with Kenya, Nigeria, South Africa and Tanzania among the top 20 of our Global Crypto Adoption Index. However, the low internet penetration in many African countries may prove to be an impediment to mass cryptocurrency adoption in some parts of the continent.