How Is Crypto Regulation Shaping Up In The 2nd Largest Continent in the World?

Africa's crypto regulation landscape is diverse and dynamic with 54 countries, six major languages, and over 1 billion people. In this article, we explore the most significant events in crypto regulation on the African continent this year. Several countries made moves regarding crypto regulation in 2024, with details of their accomplishments.

Nigeria

Nigeria is one of the countries that has made major strides in crypto regulation in 2024. Initially, the country took a tough stance towards crypto, the positions of the two regulators differed - the SEC was in favour of legalisation and the Central Bank was in favour of prohibition. Eventually, regulation for the industry emerged in 2022 with SEC’s Digital Assets Rules. But due to high inflation, the country was on the verge of banning cryptocurrencies in the first half of 2024. Criminal cases against Binance employees and the company's withdrawal from the country were part of this campaign.

However, crypto ban wasn’t imposed. On August 29, 2024, the country’s Securities and Exchange Commission announced it had granted licenses to two crypto exchanges, Quidax and Busha. Also Nigeria is going to provide a 2024 Tax Bill, which will probably provide regulation for crypto taxation.

South Africa

South Africa made a big move in crypto regulation this year after FAIS Act approval in 2023. It is a country with the most transparent licensing procedures for crypto entities in Africa and 248 companies licensed as CASPs. Only 9 applications from 430 sent to the local regulator (FSCA) were declined.

Also SA has its crypto tax framework. In October 2024, the South African Revenue Service warned South Africans about failing to file their taxes on crypto assets.

Mauritius

The island nation of Mauritius has been at the forefront of crypto regulation in Africa. Following the passing of the Virtual Assets and Initial Token Offering Services (VAITOS) in 2022, it is the only country in Africa that complies with all forty recommendations of the Financial Action Task Force (FATF).

Each year, the country continues to change its legislation to support the crypto sector. For instance, in the 2024/2025 budget speech, the government stated that it plans to introduce a 10-year expert Occupation Permit to attract in its crypto sector.

Kenya

Like most African countries, Kenya does not have explicit provisions for the crypto sector. However, crypto is not outright banned in the country. The country recently amended its Income Tax Act to include a digital services tax, which can be interpreted to mean a tax on crypto activity.

However, there is still no VASP licensing procedure implemented in Kenya. Crypto enthusiasts represented by the Blockchain Association of Kenya (BAK) have sent its version of crypto bill to the local parliament this year. But it has not yet come to a vote in parliament.

Seychelles

In July 2024, Seychelles passed the Virtual Asset Service Providers Bill 2024, which regulates the activities of token issuers and virtual asset service providers in the country. This law created the first-ever framework for regulating cryptocurrency transactions and licensing VASPs. Cryptocurrency companies operating in Seychelles have until 31 December 2024 to apply for the relevant licence.

Morocco

During a recent speech at the Regional High-Level Symposium On Financial Stability in Rabat, Morocco, Mr. Abdellatif Jouahri, the Governor of Bank Al-Maghrib stated that the country plans to launch crypto regulation soon. He stated that they were working with the World Bank, and other stakeholders on the draft law.

Tanzania

In its Finance Act 2024, Tanzania introduced regulation for the crypto sector. Under the new law, non-resident operators of crypto platforms will have to pay a 3% tax when they make payments to Tanzanians.

Rwanda

A recent report by the Africa News Agency revealed that Rwanda plans to launch crypto regulation in the first quarter of 2025. The effort is being undertaken by Rwanda’s central bank in collaboration with the country’s Capital Market Authority (CMA).

Previously, the Rwandan central bank released a research paper on a Central Bank Digital Currency (CBDC). The country’s National Payment System (RNPS) Strategy 2018 – 2024 envisions a cashless society with fiat-based cryptocurrency, and discusses policy measures to make it a reality.

Ghana

Ghana could be one of the latest entrants in the crypto regulation club of Africa. In August, the country’s central bank released a draft regulation for the crypto sector. The draft rules would allow Ghanaians to transact in crypto. However, the ban on banks from dealing with crypto that was passed in 2023 would remain in place.

Ethiopia

In June 2024, Ethiopia’s central bank announced that the country’s parliament had passed a new draft regulation. The regulation calls for the establishment of a central bank digital currency (CBDC). If passed, it would make Ethiopia the second African nation to adopt a CBDC after Nigeria.

Regulation in Other African Countries

Besides the above countries, various regulators, and regional organizations are working on coherent crypto regulation. For instance, Namibia and Botswana have already passed crypto regulations. Botswana passed the Virtual Assets Act, 2022, while Namibia passed the Virtual Assets Act, 2023. The Central African Republic attempted to pass a law to recognize Bitcoin as legal tender a while back. However, the move was thwarted by the COBAC, the regional banking regulator, and pressure from the IMF.

Conclusion

While several African countries have made huge progress in crypto regulation, a huge chunk of countries on the continent have no crypto regulation or even crypto ban. For instance, in Egypt, all crypto transactions are prohibited. In 2023, the country’s central bank issued its fourth warning regarding the prohibition of crypto activity in the country. In Uganda, the government has issued a public statement stating that it does not recognize any type of crypto. Its statement added that the government has not regulated any crypto business in the country. Additionally, the government warned that anyone who engages in crypto trading is not protected by the consumer protection laws of the country.

Various factors contribute to this problem, which includes political instability. Additionally, low internet access in some countries means that such regulation is not a priority. Besides that, high levels of inflation, and weak financial systems mean that regulators are not incentivized to allow crypto use, which could further destabilize their financial systems.

Another factor contributing to the lack of regulation is a need to coordinate with international financial organizations, such as the IMF. A clear example is the Central African Republic, which had to abandon plans to recognize Bitcoin as legal tender. Despite these challenges, Africa has experienced major growth in crypto adoption. As the wave of crypto adoption continues to spread, it could force countries that have ignored the issue so far to take action.

I prepared this article in collaboration with Kenyan crypto enthusiast Eric Maina. If you are interested in crypto regulation, please subscribe to my Telegram channel or check crypto regulation country ranking here.