Governments across Africa are striking a firm tone regarding bitcoin and cryptocurrencies, with Algeria’s congress expected to ban all cryptocurrencies.
And Kenya’s central bank warning against the risks of cryptocurrency, and an advisor to Ghana’s ministry of communications describing “fear of the unknown” as the principal barrier to greater adoption of virtual currencies. In other news, a Kenyan man has negotiated to pay the ‘goat portion’ of his dowry using bitcoin.
Kenyan Central Bank Fears Bitcoin May Comprise “Ponzi Scheme”
The Governor of the Central Bank of Kenya (CBK), Dr. Patrick Njoroge has warned Kenyans against the risks and lack of protections afforded to cryptocurrency traders. Referring to a previous warning issued in 2015, Dr. Njoroge stated that the CBK “warned everybody that this was a risky venture and the consumer is not protected.
It could very well be a Ponzi scheme of a kind, I think you have seen how the prices have gone up and down in various places. Our point is that there is risk and it is important that everybody knows that those risks can come back to haunt us and could have financial stability concerns.”
Despite the warning, Dr. Njoroge recently expressed his hesitance to rush to regulate cryptocurrencies, describing the CBK as being “open” to innovations in financial technology. Speaking at the recent Global Financial Forum in Dubai, Dr. Njoroge stated: “If you’re the regulator, you have to be careful that all risks are taken care of, including in cryptocurrencies, but we’re very open to innovation.”
Kenyan Citizen Arranges to Partially Pay Dowry Using Bitcoin Rather Than Goats
The topic of bitcoin has been in Kenya’s news cycle recently, following Kenyan citizen, Anthony Mburu’s decision to pay a portion of his dowry using bitcoin. The young bitcoin miner negotiated to pay the ‘goats portion’ of his dowry using bitcoins – and has so far paid the equivalent of 25 of the 100 required goats.
The 26-year-old Mr. Mburu quit university in 2010 only one semester into an engineering course. Mr. Mburu recently discussed his decision with Kenyan media, stating “Formal education is good. It will give you an average life.
You’ll eat, have your mortgage, car loan and all that – live an average life; struggle through life to the end.” Since discovering the cryptocurrency, Mr. Mburu states that his entire life has come to revolve around bitcoin. “Everything is bitcoin. Where I live, bitcoin; what I drive, bitcoin; investment, bitcoin. It will be a bitcoin wedding”, he said.
“Fear of the Unknown” Hinders Ghanan Bitcoin Adoption
Ghana’s cybersecurity advisor to the ministry of communications, Albert Antwi Boasiako, has described “fear of the unknown” as the principal barrier to greater cryptocurrency adoption throughout the African nation. Speaking at the recent Ghana Blockchain Conference, Mr. Boasiako stated “We have our fears about cryptocurrency but discussions are still going on. Our country is still hesitant to adopt Bitcoin as a legal tender is the fear of the unknown.”
Mr. Boasiako emphasized the need for Ghana’s tech community to mobilize in order to demystify cryptocurrencies, stating “We are battling fear, the state doesn’t want to move forward because it doesn’t know what’s there. To demystify cryptocurrency, we need a community-driven agenda.
We need to strategically demystify the misconceptions around cryptocurrency and get it integrated into the government digitization agenda.” Mr. Boasiako suggested the establishment of a “working group on cryptocurrency that has members from stakeholders like the Bank of Ghana”, recommending that such a body should closely monitor developments in the sphere of cryptocurrency regulation in other jurisdictions.
Algeria Expected to Ban All Cryptocurrencies
Last month, it was reported that Algeria’s congress had begun to consider new financial legislation that would see all cryptocurrencies banned throughout the country. The ‘2018 Finance Bill’ states that “The purchase, sale, use, and holding of the so-called virtual currency is prohibited.
The virtual currency is the one used by Internet users through the web. It is characterized by the absence of physical support such as coins, banknotes, payments by check or bank cards”, specifying that “Any violation of this provision is punished in accordance with the laws and regulations in force.”
An accompanying memorandum emphasizes the concerns that bitcoin’s potential anonymity sparks among Algerian lawmakers, stating “Algeria hopes to establish a stricter control over this kind of digital transaction, which can be used for drug trafficking, tax evasion, and money laundering thanks to the guaranteed anonymity of its users.” The document asserts that despite cryptocurrencies having “long been the prerogative of illegal transaction”, they are able to “get rid of their bad reputation in democratizing and attracting a wider audience.”