Over the last few weeks of May, new developments have come up relating to crypto regulation in a few African countries: South Africa, Egypt and Malawi.
South African bank digital currency: In a tender notice, South African Reserve Bank (SARB) sought out applications for prospective solution providers in anticipation of feasibility project on issuance of a central bank’s issued digital currency (CBDC). The project is termed as broader fintech programme by the bank and the digital currency would be backed by central bank. Some of the details about it would be:
- -should be a complementary to cash and is not intended as a replacement
- -limited supply
- -legal tender
- issued in a highly secure and trusted modern cryptographic mechanisms
- -distributed to commercial banks and other licensed service providers
- -one on one parity with the South African rand
- -should be ubiquitous and accepted as means of payment
- -no risk of distabilizing the existing financial sector
- provide stakeholders with opportunity to innovate in terms of payment solutions
- consumers should be able to transact in CBDC without need of a bank account.
- enable person-to-person settlement, physically and online without need to rely on current settlement terms.
Egypt new stance on cryptocurrencies: business dealing with promotion, creating and operating platforms for issuing or trading cryptocurrencies are required to obtain a license from the Central Bank of Egypt (CBE). In a new draft bill CBE seeks to have the right to issue rules governing trading and dealing with cryptocurrencies. (source:Egypt independent )
Malawi issues warning: Reserve Bank of Malawi (RBM) issues warning that cryptocurrencies are not legal tender in the country and are outside the purview of the institution. RBM governor, in a statement noted the increased public interest in cryptocurrencies. While cautioning the public about participating in cryptocurrencies, RBM also noted that they are aware cryptocurrencies are used as a means of payment, medium of exchange, store of value or invested assets online. Nonetheless, the governor warned that RBM would not approve nor recognize any inbound or outbound foreign investment in cryptocurrencies. (Source:NyasaTimes)
Majority of countries in Africa have adopted the ‘wait and see’ approach when it comes to crypto regulation. Nonetheless, interest in cryptocurrencies and blockchain seems to be growing. Outright bans have been issued in various countries. However, some countries have also began making progress by trying to establish regulatory sandboxes, forming taskforces and regulations governing crypto related companies such as exchanges.