The Boom of Cryptocurrency Adoption in Africa due to Covid-19 Pandemic

Due to Covid-19 pandemic we can see a growing interest in Bitcoin and cryptocurrency on the African continent in 2020.

Interest in digital currency is booming steadily in the region. Some economists believe cryptocurrency is a disruptive innovation which will flourish in the region. 

The data from Google Trend shows Uganda, Ethiopia, Nigeria, South Africa, Kenya and Ghana are all ranked among the first 10 on the topic of cryptoassets, and that displays the upward interest therein. And Bitcoin is ranked the most successful than others in Africa.

African Countries Push Towards Regulating Cryptocurrency Business

According to the report released in August 2018, most countries in the African continent were still undecided on what to do as far as cryptocurrency regulation is concerned. At the time more than 20 countries had no clear stance on digital currency regulation. It was only Nigeria and South Africa that had revealed their opinions and stances on cryptocurrency regulation plans.

Cryptocurrency works autonomously from the central bank and consequently, they aren’t backed by the South African Reserve Bank (SARB). Currently, the country lacks regulations which exactly govern the use of cryptocurrencies.

But now, governments and regulators are doing everything possible to take advantage of a boom in digital currency trade. 

Nigeria first held a meeting on cryptocurrency regulation back in 2018. At that time it had refused to recognize cryptocurrencies including Bitcoin, as legal tender. In 2018, the Central Bank of Nigeria (CBN) said that cryptoassets weren’t considered as money.

However, the Securities and Exchange Commission (SEC) of Nigeria revealed it will strategize on regulating trade in cryptocurrencies with the intention of offering protection for venture capitalists and to guarantee that digital payments and transactions are fast, secure and transparent. The regulator is working hard to standardize when the character of the funds meets the requirements as securities transactions. The government wants to make standards that boost ethical practices in fintech.

More Users Began Using Cryptocurrencies Due to Coronavirus Pandemic

As per the report by apptopia, more people globally started using cryptocurrency to prevent the spread of Coronavirus disease. And due to the increasing transaction volume recorded during the Covid-19 pandemic era, the Kenya’s Revenue Authority ( KRA) now plans to bring a special tax unit that will be tracking and taxing transactions with the use of “data-driven detection” and the new tax called Digital Service Tax (DST) is anticipated to come into force on January 1, next year.

Even though the government of Uganda does not recognize any cryptoasset as legal tender in the country, and has not licensed any company to trade or facilitate cryptocurrency-related transactions, the citizens have increasingly conducted transactions and invested in Bitcoin and other cryptocurrencies.  This is because, in 2018 during the Blockchain conference in Kampala, President Yoweri Museveni encouraged people to embrace new fintech innovations including Bitcoin and blockchain technology.

Therefore, as the number of users using blockchain and digital currency has grown in Africa especially during the Coronavirus pandemic period and this has also helped to raise cryptoasset cognizance and adoption among fresh users.