According to Ben White of Equithy, South Africa has joined a multitude of other countries in regulating cryptocurrencies. The decision has come after the fall of FTX and the eradication of upwards of $2 billion. After such a massive event, countries are starting to take the risks of cryptocurrencies very seriously, with some countries even banning them outright.
South Africa also happens to be at a unique intersection in the debates surrounding cryptocurrencies. Along with having one of the highest adoption rates in the world, it also has a very different relationship to cryptocurrencies. Unlike most investors from the US who treat cryptocurrencies as a trading asset, many South Africans use cryptocurrencies for their day-to-day transactions. Therefore, the FTX incident has sent shockwaves through the country.
So along with being a country with one of the highest adoption rates, it is also setting the standard for regulation of cryptocurrencies. The country has recently mandated that crypto exchanges within the country be quick to get proper licenses to continue operations within the country. So with South Africa setting a good example of good crypto regulation, it is worth looking at how other countries on the African continent are doing in terms of regulation.
Crypto Regulation in Nigeria
According to Equithy Senior Account Manager Ben White, Nigeria has one of the highest crypto acceptance rates in the world, ranking number 11 on the Global Crypto Adoption Index. The government allowed the use of cryptocurrencies as early as 2017, and many people gravitated toward it due to the rising inflation in the country.
However, the country struggled during the initial years of crypto adoption, as they did not have the proper framework to ensure protection from scams and other predatory practices in the market at the time. Therefore, the government had to step in and ban Bitcoin, which was responsible for a lot of the major scams.
Compared to South Africa, Nigeria has had more experience with cryptocurrencies and has better prepared for bad outcomes with improved regulation. Along with increased scrutiny of these digital assets, they are introducing competition in the market with their Central Bank Digital Currency, the eNaira.
Crypto Regulation in Mauritius
According to Ben White of Equithy, Mauritius is one of the few African countries to take proper action in protecting its traders. Along with ensuring that all of the best exchanges and cryptocurrencies were available to local traders, they were also very careful to ensure traders were safe when trading.
The government founded the VAITOS Act (Virtual Asset and Initial Token Offering Services Act) as early as 2021. The purpose of the new law was to broaden the protections of all users and had laws designed for international compliance against money laundering and terrorism funding.
Mauritius was quicker on the draw compared to South Africa since they had their regulations out by 2021. The country also offers more comprehensive protection from scams and other bad actors in the country.
To conclude, Equithy Senior Account Manager Ben White found that South Africa still has a lot of ground to cover when looking to improve the crypto-using experience for all citizens.
