Just yesterday, Burundi; a country in the south-east of Africa, joined the list of African countries that have outlawed Bitcoin and other cryptocurrencies.
The country officially placed a ban on all forms of transactions involving bitcoin and other digital currencies on its soil, declaring them as “illegal” and threatening “strong measures” against those who failed to heed the ban.
A representative of Burundi’s apex financial institution revealed that the ban was triggered due to the cries of the locals who had lost money to various crypto trading schemes and the government’s inability to protect users of digital currencies in such cases. An outright ban on crypto, thus, became the most viable option.
With that, Burundi effectively moved from the list of African countries that are still skeptical and/or indifferent about cryptocurrencies to the growing list of nations where any kind of activity involving such digital currencies is deemed a punishable crime.
Now, here’s a look at a few other African countries where one might get into some trouble just for using terms like Bitcoin and Ethereum.
The purchase, sale, use, and holding of so-called virtual currencies is prohibited in Algeria, and it has been so since 2018. Virtual currencies are those used by internet users via the web. It is characterized by the absence of physical support such as coins, notes, payments by cheque or credit card. In Algeria, any breach of this provision is punishable in accordance with the laws and regulations in force.
In November 2017, the exchange office issued a public statement in which it declared, “The Office des Changes wishes to inform the general public that the transactions via virtual currencies constitute an infringement of the exchange regulations, liable to penalties and fines provided for by [existing laws] in force.”
The following day, the monetary authorities also reacted in a statement issued jointly by the Ministry of Economy and Finance, Bank Al-Maghrib and the Moroccan Capital Market Authority (AMMC), warning against risks associated with bitcoin, which may be used “for illicit or criminal purposes, including money laundering and terrorist financing.”
It follows that cryptocurrencies are not welcome in the Kingdom of Morocco.
In 2017, the Bank of Namibia announced that it considers the spending of cryptocurrency within the nation to be illegal and advised Namibians to be wary of malfeasance and other risk factors, should they choose to trade in cryptocurrency.
The Bank issued a position paper that interprets two longstanding Namibian legal acts to be prohibitive of the commercial use of cryptocurrencies and offering no legal basis to support the establishment of virtual currency exchanges in Namibia.
Though the Bank made no reference to any legal penalties that users might incur for dealing in cryptocurrency, it was unequivocal in stating that “a local shop is not allowed to price or accept virtual currencies in exchange for goods and services.”
In 2018, Egypt’s Dar al-Ifta, the primary Islamic legislator in Egypt, issued a religious decree classifying commercial transactions in Bitcoin as haram (prohibited under Islamic law). But in May this year, the country loosened up its crypto regulations somewhat when it put forward new laws that will allow only licensed crypto exchanges to operate in Egypt.
Crypto Relations In Africa – A Checkered History
A report released by Ecobank on the state of cryptocurrency regulation in sub-Saharan Africa in 2018 showed that out of the 39 countries studied, only two — South Africa and Swaziland — have a favourable or official permissive stance on cryptocurrencies.
While Burundi has recently taken a stand by joining the likes of Algeria, Morocco, and Namibia in outlawing digital currencies, cryptocurrencies are stuck in some kind of regulation limbo everywhere else on the continent.
Most African governments have neither banned crypto, nor endorsed it, apparently biding their time as they attempt to get familiar with all the elements of digital currencies and formulate regulations to keep it in check.
As the report by Ecobank puts it; “African governments and central banks are mostly adopting a ‘wait and see’ approach when it comes to regulating cryptocurrencies.”
“Rather than being the first mover,” it adds, “African countries appear to be looking to their neighbours to regulate and innovate first, and learn from their mistakes.”
But even as most African governments seem to be biding their time, cryptocurrency is actually thriving in some places.
In Zimbabwe, for instance, cryptocurrency trade has notably risen mainly due to the country’s economic crisis as locals continue to turn to bitcoin as a store of value. Indeed, for a brief period, Zimbabwe had the highest bitcoin prices in the world.
It’s a similar story in Nigeria where cryptocurrencies have become quite popular despite the absence of formal regulations — the Central Bank of Nigeria (CBN) has only gone from warning banks and locals against dealing in virtual currencies to reportedly weighing the option of a potential policy proposal.
Despite that, peer-to-peer bitcoin trading in Nigeria increased by nearly 1,500 percent in 2017 (only China posted better numbers). And even though things have stalled somewhat on that front, crypto trading remains popular in Nigeria, as it is in several other countries across Africa where individuals appear to have taken the silence of the regulatory bodies as permission, if not consent.
Featured Image Courtesy: bitnewstoday.com