The International Monetary Fund (IMF) is calling for greater regulation of the African crypto market, one of the fastest growing markets in the world. report November 22.
The Financial Fund cites the collapse of FTX and its ramifications for cryptocurrency prices among the reasons countries in the region need to embrace regulation, stating, “We call for greater consumer protection and regulation of the crypto industry. There are new voices,” he said.
Furthermore, the authors argue that “the risks from crypto assets are obvious” and that “it is time to regulate” to find a balance between minimizing risk and maximizing innovation. . Based on the October 2022 Regional Economic Outlook for Sub-Saharan Africa, the article states that “the risks are much greater if cryptocurrencies are adopted as legal tender,” suggesting that governments will not allow cryptocurrencies as a means of payment. If accepted, it poses a financial threat.
The publication also states:
“Policy makers are also concerned that cryptocurrencies could be used to illegally transfer funds out of the region or circumvent local rules to prevent capital outflows. Widespread use of crypto could also undermine the effectiveness of monetary policy and create risks to financial and macroeconomic stability.”
According to IMF data, 25% of countries in sub-Saharan Africa formally regulate cryptocurrencies, and two-thirds have some restrictions in place. Meanwhile, Cameroon, Ethiopia, Lesotho, Sierra Leone, Tanzania and the Republic of the Congo have already banned crypto assets, making him 20% of the countries in sub-Saharan Africa. Kenya, Nigeria and South Africa have the highest number of users in the region.
Data from analytics firm Chainalysis shows that between July 2020 and June 2021, the value of African cryptocurrency markets increased by more than 1,200%, with high adoption seen in Kenya, South Africa, Nigeria and Tanzania. .
According to a Cointelegraph report,Ghana is Central Bank Digital Currency (CBDC)Bank of Ghana executive Kwame Oppon said the country’s initiative aims to promote financial inclusion. Ghana could achieve similar crypto adoption levels to Kenya and Nigeria, where he ranked 11th and 19th on Chainalysis. Global Crypto Adoption Index.