Crypto regulation framework in Africa: Why we need it and who really benefits

Published on:

  • Governments intend to establish crypto laws to govern and set parameters in which crypto can benefit not just its citizens but its country as a whole
  • Some have interpreted this move by governments as a threat, a way they can control a concept designed to fight them
  • South African government has made various steps in designing crypto laws. It recently made headlines for its newest achievement in establishing a crypto regulation framework that recognizes crypto assets as a financial product.

The surge of bitcoin and cryptocurrency is felt throughout Africa and globally. This consistent rise in crypto adoption has given way to innovations, new startups and new concepts. Fintech and Blockchain technology has also taken root in various African countries.

The idea of crypto assets revolves around the digital world, an untouchable but real world hence begs the question, “How do we put a value on a coin that we cannot see”. The mechanism is a bit complex, but it raised the need for crypto regulations. To tie down the crypto balloon a little closer to the ground. Are crypto laws benefitting the various African governments,  crypto traders, or both?

The factors behind the success of crypto adoption rate in Africa

Numerous reports, articles, videos and blogs have addressed the new research by Chainalysis concerning the massive crypto adoption rate in Africa. Crypto exchange platforms have increased their pace in contacting various African governments. Some are preparing for the consecutive crypto tour to acquire great minds to join their franchise. 

This increased demand for crypto assets has caused shockwaves throughout the crypto industry, and many fail to see how it came to be.

crypto regulations
Crypto regulations or crypto laws has been a topic of debate. Does blockchain and crypto assets need rules or is it just a ploy to control it?.[Photo/FinancialTimes]
The Crypto adoption rate in Africa greatly owes its success to various vital elements. One is Mpesa, the mobile money transfer that revolutionized financial institutions. This payment startup was like gold to many Africans who could not access standard banking services and had to keep their money under lock and key.

It ushered in the age of blockchain in Africa by bringing a precursor to decentralized money. Many highly appreciated and adopted this new and simple idea, and various African countries have fully integrated Mpesa into their daily lives.

This has created a pathway for crypto assets since the concept of transferring intangible money had already existed.

The nature of blockchain technology is the second core factor that significantly contributed to the massive crypto adoption rate. Its decentralized nature was easily applicable in Africa, and various startups implemented it, and their mechanism has led to fame and success.

Finally, the devaluation of African fiat currencies has led Africans to lean on crypto assets and blockchain. This is to acquire that additional money and stay afloat. This factor is also the reason why digital currencies need crypto laws to ensure that crypto does not outrank fiat currency in terms of use.

Also, Read Does Africa really depend on Web3 or does Web3 owe Africa a great deal

Existing crypto regulations in Africa

Governments intend to establish crypto laws to govern and set parameters in which crypto can benefit not just its citizens but its country as a whole. The new nature of crypto assets, however, is not widely appreciated. 

From a global perspective, there have been fears that spillover will occur between the stock market and cryptocurrencies.

This will happen if cryptocurrency is not regulated and set crypto laws are clearly defined. Early this year, the International Monetary Fund conducted data analysis to indicate a correlation between bitcoin and the S&P 500 and proved this assumption. 

African governments fear the numerous applications of blockchain technology and crypto assets. They are sceptical that tokenization, decentralized finance, NFTs and decentralized autonomous organizations will present problems.

Their central concept challenges traditional financial systems; the increased growth rate of crypto adoptions leaves a looming threat of individuals abandoning banks and mobile money altogether. In doing so, the economy would suffer catastrophic results for the country.

Crypto regulations in South Africa

South Africa is one of the leading African countries in crypt adoption. Its government has made various steps in designing crypto laws. It recently made headlines for its newest achievement in establishing a crypto regulation framework that sees crypto assets as a financial product.

Also, Read African Central Banks present valid arguments against CBDCs and digital assets

El Salvador

EL Salvador is the first African country to recognize bitcoin as a legal tender. They had to construct a regulator framework that tied this crypto asset to its governments.

This move was to regulate the value of Bitcoin to its country to ensure that it does not severely suffer from Bitcoin’s volatility. It was, however, not an easy feat. The IMF had to pause its ongoing negotiations with El Salvador to loan the country $1.3 billion as an assistance package.

This was a strategic move to tackle the country’s debt. It allowed sustainable public spending, taking issue with the cryptocurrency’s lack of transparency and environmental cost. Many still view it as an act of desperation due to the inaccessibility of bitcoin since nearly half of its population lacks Internet Access.


Nigeria ranked the top African country in crypto adoption, has recently had a change of heart. Their vice president indicated his interest in creating crypto laws that would govern the use of cryptocurrency. In addition, it would also show how Nigeria as a country can benefit from it.

They established various crypto regulations, such as ensuring every crypto asset or service has its Virtual Asset Service Provider License.

Nigeria’s government imposed another crypto law on all crypto exchanges providing service to Nigerians. They are now required to provide a permit that gives the Commission access to its records and submit trading information at a set interval.

Tanzania has shown interest in creating new crypto regulations for its country, but there is still no solid progress. The remaining big leagues in Africa’s crypto adoption, Kenya, Ghana, and Egypt, are still firm on the crypto ban established, and no crypto laws are in the foreseeable future.

Who benefits from crypto regulations

Discussing the need and importance of crypto laws has caused various sparks among analysts. Some have interpreted this move as a threat, a way the government can control a concept designed to fight them. While others claim that crypto laws are a way to protect citizens.

Essentially from the unjust deeds brought by a lawless land; be it virtual or real, laws help set boundaries.

The main reason why various crypto enthusiasts reject the notion of crypto laws is that they believe in doing so, the innovations birthed from blockchain will reach a bottleneck. Placing restrictions on a concept that opposes having a central command devalues its very nature.

If the same centralization rules would eventually govern decentralization, why was it created in the first place? This theory has rippled through many minds but is only one-sided and devoid of innovation.

On the other side of the coin, experts have stated that crypto regulations would act as a shield to investors all over. The greatest plague of cryptocurrency is its volatility and having set crypto regulations to prevent market manipulation and protect investors. Many claims that if governments established crypto laws during the golden years of Bitcoins, its value wouldn’t have plummeted. 

Another advantage of crypto laws is they would limit the number of cryptocurrencies. Scarcity brings value; currently, thousands of crypto coins are in the digital world. Having crypto regulations will filter out all the unnecessary coins. This draws focus to the select few coins, allowing investors to know the crypto assets they are dealing with honestly.

Also, Read Crypto making millionaires in Nigeria despite government hostility

The final but most important aspect of crypto regulations is its ability to protect against online fraud and cyber security. Investing in cryptocurrency is a gamble since there are still many unknown variables.

Online fraud is still rampant, and even though there is a reduction in crypto hacks, they still exist. Crypto regulations tie digital assets closer to the government and its government accountability. They would no longer have the right to merely be bystanders. They would have to actively participate in securing crypto for their users.


Blockchain and crypto assets are still widely used in Africa, and from the above section, we’ve seen that both sides have logical arguments.

The central concept of crypto is enabling its users’ complete control over it. Crypto regulations take that away; hence not many are enthusiastic about the idea. Despite this, crypto laws hold significant merits, and the government would play a critical role in Africa’s crypto adoption rate.

Their participation will encourage more Africans to participate in crypto trading, but most are unwilling to touch the sensitive subject. In light of this article, crypto regulations are essential; their merits outweigh their demerit, but compromise is a fundamental element necessary worldwide. The only way crypto regulations can truly benefit both sides is by finding the silver line in between.

Read: The growth and adoption of blockchain in Africa might be faster than earlier contemplated


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Ken Mutuku
Ken Mutuku
Your Guide to the Future of Tech, Web3, and Digital Storytelling. With a keen eye for detail and a knack for concise communication, Ken Mutuku is your go-to professional for decoding the next wave of technological evolution. Whether through captivating videos, insightful articles, or engaging presentations, he masterfully crafts messages that deeply resonate with his audience, setting him apart in the digital landscape.