The IMF Proposes Reinforced Regulation for Africa's Crypto Markets

The International Monetary Fund (IMF) has proposed an increase in regulation and better consumer protection in Africa's cryptocurrency market.

The proposal comes in the context of FTX's downfall and the subsequent drop in the prices of Bitcoin, Ethereum, and other crypto assets. According to IMF citing a Chainalysis report, Africa's crypto market is growing at a rapid pace, but it's still one of the smallest in the world with crypto transactions peaking at USD 20 billion per month in mid-2021. 

One of the main concerns is that cryptocurrencies can be used to transfer funds illegally out of the region, while widespread crypto use could affect monetary policy effectiveness. The IMF is particularly worried about countries where crypto is accepted as legal tender, a statement based on data from the October 2022 Regional Economic Outlook for sub-Saharan Africa report. 

IMF's data shows that 25% of countries in sub-Saharan Africa have formally regulated crypto while two-thirds have explored and implemented a number of restrictions. On the other hand, crypto assets are banned in African countries such as Tanzania, the Republic of Congo, Cameroon, Ethiopia, Lesotho, and Sierra Leone. 

The highest number of cryptocurrency users in the region are from Kenya, Nigeria and South Africa. According to cointelegraph.com, the cryptocurrency market in Africa has seen a sharp growth of more than 1,200% between July 2020 and June 2021.

(Source: The Paypers)