Cryptocurrencies in Africa: Burundi Bans Digital Money
There has been a lot of talk about cryptocurrencies in Africa lately. Are Bitcoin (BTC), Ethereum (ETH) and other digital tokens the future of financial transactions there?
The government of Burundi doesn’t seem to think so and has just made all cryptocurrencies illegal. Overall, it looks like Bitcoin and Co are facing an unsure future on the continent.
The Situation in Burundi
Recent reports from the Republic of Burundi say that the country in east-central Africa has now banned the use of all digital currencies, including Bitcoin.
This prohibition comes after fears over the security of trading with the digital currencies. It has been said that the government in Burundi took action after being alerted to the fact that some of its citizens had lost money in crypto trading.
Alfred Nyobewumusi is a director in the microfinance department of the nation’s central bank. He is quoted as saying that they will take “strong measures” against anyone who doesn’t respect their decision on this matter.
Cryptocurrencies in Africa: Other Countries
Many African countries still have no official ruling on the legality of Bitcoin and other virtual coins. Meanwhile, there are a growing number of exchanges operating on the continent. Africa-centred ICOs such as Golix and Wala have also raised awareness of how the blockchain could be used here.
Of course, digital tokens are particularly useful in places with high inflation rates. It is no surprise that countries such as Zimbabwe, Kenya and South Africa have had high Bitcoin adoption rates. The common factor that these countries share is periods of rapidly rising inflation and when economies face problems with their fiat currencies, crypto seems like a safe haven for many.
Another country to issue a statement recently on the subject of cryptocurrencies in Africa is Uganda. They stated earlier this year that digital coins like Bitcoin and Tether aren’t legal and won’t be recognised. The deputy governor of the Bank of Uganda – Louis Kasekende – issued a warning. He mentioned that people who buy unregulated currencies have limited protection. Kasekende pointed out that the authorities are able to monitor regulated financial services more effectively.
What Does the Future Hold?
It has been suggested that tokens like Bitcoin could help to increase financial inclusion in Africa. They could be used by people who don’t have access to traditional banking facilities. For example, in Burundi it is estimated that just over 7% of the population have bank accounts. Some estimates are even lower. Overall, two-thirds of Sub-Saharans don’t have banking facilities, according to the World Bank.
Perhaps some African countries will follow Latin America with a launch of their own cryptocurrencies, like Venezuela and Ecuador. Encouragingly, the African nations of Senegal and Tunisia are classed as being among the pioneers in issuing official state cryptocurrencies. There has even been talk of a crypto-powered city in Senegal.
Certainly, the potential benefits of cryptocurrencies for the unbanked in Africa appear to be too good to be overlooked for much longer.