Bitcoin Ban in Africa: As the popularity of Bitcoin and other cryptocurrencies has grown. Governments have been struggling to figure out how to regulate them. Or whether they should even be regulated at all. In Africa, some countries have embraced crypto while others have chosen to outlaw it completely and ban it from their country. Here’s a list of African countries where Bitcoin and other cryptocurrencies are restricted or illegal.
Although the value of Bitcoin has dropped considerably in 2018. There are still some African countries that have either banned it. Or are restricting the use of cryptocurrency in their jurisdictions. If you’re new to the world of Bitcoin, this guide will help you understand which governments are taking action against cryptocurrency and what you can do about it.
The price of Bitcoin has been dropping this week, and it’s not difficult to see why. Bitcoin has long had an image problem thanks to its link with the dark web and illicit activity. But now several African governments are calling for the cryptocurrency to be outright banned in their countries. Leading many to believe that this could spell the end of the much-hyped digital currency. We take a look at the countries where Bitcoin is restricted or illegal in Africa (so far).
Read More: How to Trade Bitcoin Futures Contracts
The history of bitcoin, from its inception to its continued development and use today, is a fascinating one. Once merely an idea discussed by pseudonymous cryptographers, bitcoin has since evolved into a decentralized financial tool used by millions. The first bitcoin transactions took place on January 12, 2009. Between Satoshi Nakamoto and developer Hal Finney using code developed by Nakamoto. Since then, others have taken up Nakamoto’s work and pushed forward with cryptos like Nick Szabo (Bit Gold), Wei Dai (b-money), and others.
Africa Countries That Are Restricting or outlawing Cryptocurrency Are:
In June 2018, Algerian financial authorities prohibited banks and other financial institutions from engaging in transactions related to crypto. The agency asked for relevant institutions to cooperate with authorities and stop offering services related to crypto. Crypto is considered a high-risk activity by Algeria’s banking watchdog.
In November 2017, a government statement said that cryptocurrency is not authorized by any central bank or any other authority. Bitcoin, ripples, and many other virtual currencies are illegal. The use of cryptocurrency is risky and susceptible to criminal abuse because it is anonymous. All users of virtual currency are requested to refrain from its purchase until further notice from financial authorities. It warned citizens of potential risks as cryptocurrencies do not fall under any regulation/supervision. And cannot be used for payments or commercial transactions within Burkina Faso’s jurisdiction. Therefore, Central Bank does not guarantee savings invested in such currencies against depreciation or loss through hacking or fraudulent platforms created for crypto-mining purposes.
On January 9, 2018, the Bank of Central African States (BEAC) advised financial institutions in its member countries to take precautions when dealing with cryptocurrencies. BEAC believes that cryptocurrencies pose a risk to their operational stability and security. Ghana: In February 2018, Ghana’s central bank warned investors about trading bitcoin and other cryptocurrencies. On May 25, 2018, its central bank said it would not recognize digital currencies such as bitcoin as legal tender but expressed an interest in underlying blockchain technology. Kenya: The Kenyan government has banned banks from working with cryptocurrency exchanges. At least three Kenyan exchanges have suspended their services after receiving notifications from local banks.
The country banned Bitcoin and other cryptocurrencies on September 15, 2018. The government cited the unregulated nature of cryptocurrencies and raised concerns that they could be used for money laundering and funding terrorism. Citizens were warned not to use virtual currencies for any transactions. The ban was lifted on October 10, 2018, after a study group established by Prime Minister Abiy Ahmed presented its recommendations on how best to regulate cryptocurrency usage. In addition to lifting restrictions, Ethiopia has decided to join countries like South Korea in developing a national digital currency system. While no official timeline has been announced, there are plans to launch an initial coin offering (ICO) sometime next year with one of Africa’s largest banks partnering with Israeli startup Colu to develop the new digital currency.
A notice, issued last month by Gabon’s Financial Intelligence Agency, made it clear that cryptocurrency was not legal tender and prohibited banks and other financial institutions from holding any of its virtual coins. Issued to all bank and non-bank payment service providers (in French), it asked them to comply with a number of measures aimed at stopping crypto transactions. It is unclear how these guidelines will be applied. According to news reports, some Gabonese were using Bitcoin to transfer funds to relatives who work overseas. At present, however, it does not appear that anyone has been prosecuted for doing so. Gabon’s central bank has yet to explain why it banned cryptocurrencies or what steps if any will be taken against exchanges operating there.
The Zambian Central Bank has reportedly banned Bitcoin, preventing residents from using it as a payment option. The country’s apex bank also prohibits financial institutions within its borders from transacting with cryptocurrency exchanges and digital currency service providers. The country also doesn’t recognize cryptocurrency as legal tender, according to state-owned news agency Andile Maimane. Some local media outlets have reported that citizens are allowed to trade and hold Bitcoin, but they can’t use it to pay for goods and services.
Bitcoin was made illegal in Morocco on December 8, 2017, by an official decree of the country’s Bank of Morocco. The bank is concerned about Bitcoin being used for money laundering and funding terrorism. Furthermore, it views cryptocurrency as a direct competitor to Morocco’s own currency, The Moroccan Dirham. In other words, if Moroccans began using Bitcoin instead of Dirhams, that would impact its national treasury negatively. Since December 2017 there has been a complete ban on all things Bitcoin within Morocco’s borders and further bans are expected to be issued in neighboring countries within a short period of time.
Bitcoin is not illegal under Namibian law. The Bank of Namibia issued a statement in 2013 stating that virtual currencies were neither legal nor illegal and that bitcoin posed no risk to the stability of Namibian financial markets. In 2017, Alastair Swale, Chairman of Capitec Bank (Namibia), stated that [Bitcoin] is an open platform for anyone to participate [in]. However, bitcoin is only traded on one exchange based in South Africa (Seacurus), and it’s not possible to buy it directly with Namibian dollars.
The West African country banned bitcoin and all other cryptocurrencies in February 2018. Following a high-profile heist at one of Niger’s largest banks, central bank governor Hamidou Garba said that crypto assets are not legal tender and announced plans to set up a regulatory framework for them. In September, just ahead of bitcoin’s record high, Garba told CNBC that Niger would not be lifting its cryptocurrency ban any time soon. Even so, he conceded that some people were using cryptocurrencies—and paying taxes on those gains—as a means of circumventing capital controls. This is something we will continue to watch, he said at the time.
In February 2018, the Central Bank of Nigeria warned that cryptocurrency was not a legal tender. In August, a government advisory stated that trading in cryptocurrencies is illegal. The Nigerian Securities and Exchange Commission has issued similar warnings and confirmed that individuals involved with ICOs may be arrested by security agencies. BitHub.Africa is trying to address these barriers by providing an environment for local entrepreneurs and developers to collaborate on blockchain technology. Additionally, Coindirect allows residents of Nigeria to purchase bitcoins using Naira bank transfers, Alipay, Perfect Money, and CashU. However, since bitcoin transactions are unregulated—in any country—there’s always a chance of fraud or theft (just like a stolen credit card).
The Reserve Bank of Zimbabwe has issued a warning to citizens about Bitcoin and other cryptocurrencies. In as much as we are not opposed to innovation. Some of these virtual currencies are already being used by criminals to lure unsuspecting members of the public into fraudulent transactions. Said Tafadzwa Chinamo, a spokesperson for RBZ. She also added that digital currencies have not been legalized by central banks because they are too risky. And can be used by terrorists who want to hide their identities. A statement from RBZ explains any user, holder, or investor. Or trader of virtual currencies is doing so at their own risk. Bitcoin’s current value is 1,248 USD (June 2018).
Coinmarketcap data revealed that Bitcoin is legal and unregulated in Algeria, Burkina Faso, and Niger etc. The list of countries that banned Bitcoin is not long at all. Most African governments appear to be more inclined to regulate crypto than prohibit it entirely. For example, Zimbabwe actually appears to be considering plans to create its own national cryptocurrency backed by a reserve of gold held at a regional bank. In August 2018 regulators told local banks they could no longer facilitate cryptocurrency transactions.
Finally, it’s worth noting that even though many African governments have made public pronouncements about their intent to regulate and/or ban Bitcoin. There are currently no instances of an African country having successfully banned cryptocurrency altogether. One reason for that is likely the inability to enforce such laws. But it also speaks volumes about how countries on the continent view cryptocurrencies. As a growth industry they want to be part of instead of being completely shut out.
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