You’ve heard so much about cryptocurrencies. You’ve seen some news on it. You’ve viewed countless social media posts around it too.
You probably even interacted with one or more of these cryptocurrencies yourself. Bought one. Sold one. Mined one.
You may also have been lucky enough to be gifted one.
The level of engagement and interaction you have with these assets is personal. What we mean is that it indicates how crypto-friendly you are. Your friends or immediate family may have a different perspective. They may also have different experiences towards the use and ownership of crypto.
However, it is quite interesting to note that crypto goes beyond individuals. Entire countries these days have experiences that are recognizable and valid. These can be termed as crypto-friendly countries.
In this Monierate article, we take a look at notable crypto-friendly countries in Africa. If you’re interested in knowing which countries make this list then read on.
Common Activities of Crypto-Friendly Countries
You may wonder what the signs of a crypto-friendly country are. What are some of the activities that make them crypto-friendly? How long does a country have to show these positive attitude towards crypto?
We answer those questions below in this section.
Acceptance as Legal Tender:
This might be an extreme but it’s surely worth noting. Individual countries can choose to take cryptocurrencies as legal tender. El Salvador was the first to do so. Interestingly, it still retains its stance up until today.
The Central African Republic took the same action once. However, it reversed its decision only a year later.
Accepting crypto as legal tender means two things. One; such country recognizes cryptocurrencies. Two, it believes in either the current or future potential of these assets.
They do so enough to accept it as a form of money or medium of exchange. What could be a bigger pointer to a nation’s crypto-friendliness? Probably nothing.
Installment of Bitcoin ATMs:
Bitcoin ATMs are real. Like regular ATMs, they are used for electronic transactions. However, transactions in this case involve Bitcoin and a local currency.
Users can deposit local currencies for Bitcoin. Similarly, they can trade Bitcoin for local currencies. This helps to improve adoption and access to cryptocurrencies.
Obviously, countries that support or have Bitcoin ATMs are crypto-friendly.
Purchase of Crypto as Part of National Asset:
Crypto-friendly countries also take it upon themselves to purchase crypto assets. They make it a part of their national reserve. This introduces a new type of asset diversification.
Only a few countries have so far explored this idea.
Positive and Favorable Regulations:
A crypto-friendly country would not push against cryptocurrencies. Instead, it will want to create favorable regulations. This could be both cautious and positive.
Favorable regulations come from an understanding of risks and potential. Countries that exhibit this are more likely to accept public opinions. In addition, they will continuously iterate over existing ideas and carefully weigh benefits and drawbacks.
The most popular examples of this is low or zero taxes on crypto earnings.
Dilemma of Crypto-Friendly Countries in Africa
Before we proceed, we should mention one thing. Many African countries are in a fix. This involves government bans and disapproval for cryptocurrencies on one hand. On the other, it involves adoption and increased interest from citizens.
Also, many governments are engaged in crypto-friendly activities despite outright ban on transactions. As we would come to see, this includes creating CBDCs and owning Bitcoins ATMs.
Crypto-Friendly Countries in Africa
Here’s a list of crypto-friendly countries in Africa. Please note that there may be more countries. By implication, this list is not final.
Nigeria:
Nigeria has put a strict ban on cryptocurrency transactions. The government directed commercial banks to block accounts involved in crypto activities. It is also in war with P2P trading platforms, accusing them of aiding currency manipulation.
Despite these, the country is probably the most crypto-friendly in Africa.
Nigeria has a total of 2 Bitcoin ATMs. Furthermore, the central bank has setup and launched a CBDC. This asset, called the e-Naira, was released in 2021.
It uses the hyperledger fabric technology and falls under DLT. The e-Naira is available as a retail product. This means individuals can access the asset and buy in small quantities.
Nigeria has also experimented with other types of digital assets. One of such is cNGN. cNGN was intended to be a stable coin pegged to the Naira and backed by physical cash.
Another interesting point is that Nigerians love cryptocurrencies. Bans and restrictions not withstanding, people continue to buy and trade crypto underground. The country stands as the biggest crypto market on the continent.
South Africa:
South Africa is prominently crypto-friendly. First off, it has the highest number of Bitcoin ATMs in Africa. It currently hosts 22 of these machines. This is over 77% of the continent’s total.
In addition, crypto is considered legal in the country. South Africa does not ban crypto transactions or ownership. In fact, it shows significant support for it through licensing, favorable laws, and low taxes.
Here’s an example. The FSCA issued 59 licenses in March and 75 in April 2024. This welcomes more and more crypto operators to the region.
The abundance of operators and good prompt from the government sparks interest and engagement. Evidently, South Africa’s crypto market is the second largest on the continent.
Zimbabwe:
Southern African country Zimbabwe also earns itself a crypto-friendly tag. It clearly supports digital assets. It has done so in many different ways.
One is through the launch of its own CBDC.
Zimbabwe’s CDBC is called ZiG. The asset was introduced in April 5th, 2024 by the Reserve Bank of Zimbabwe. According to the bank’s governor, this important step will help tame the dollar depreciation.
There are more pointers to Zimbabwe’s crypto-friendliness. The country is one of six nations on the continent that have a Bitcoin ATM. It has just one of these ATMs but that surely counts.
The country has also lifted its ban on cryptocurrency transactions. This means that crypto such as Bitcoin is no longer considered illegal. Nevertheless, no licenses have been issued by the government to trading platforms.
Mauritius:
Mauritius stands out as a crypto-friendly jurisdiction. In 2023, it reportedly ranked 117 of 155 countries adopting crypto, up from 131 in 2022 . Before then, it was the first African country to issue a crypto license.
The East African country began a regulatory blueprint in 2018. This classified digital assets as a tool for expert investors. One year later, it released the Financial Services (Custodian Services (digital assets)) Rules.
This came with an amendment of the Financial Services (Consolidated Licensing and Fees) Rules 2008.
Mauritius also served the Virtual Asset and Initial Token Offering Services (VAITOS) Act in December 2021. The act came into effect in February 2022. It recognized virtual asset service providers (VASPs) and ITO issuers.
Kenya:
Kenya is on the scene wherever crypto in Africa is discussed. It leads as the biggest crypto market in East Africa. Moreover, the country is reported to hold over $1.5 billion worth of Bitcoin.
What’s more interesting is that the CBK has not declared crypto as illegal. It, however, published a statement advising the public to refrain from transacting cryptocurrencies.
On CBDCs, Kenya had once showed interest before quickly reverting its stand. The central bank now suggests that it is carefully making considerations.
There’s also a place for cryptocurrency companies. These entities may acquire licenses to operate within the country.
Conclusion
Africa is not a top contender for Bitcoin ATMs, crypto legal tenders, and more. However, the continent exhibits profound interest in digital assets.
Crypto platforms worldwide attest to the increased engagement from Africans. For instance, P2P transactions in Nigeria alone are significant. Estimates between July 2022 and June 2023 stand around $56.7 billion.
Not only that. Over 22 million Nigerians are believed to own crypto assets. This represents 10% of the entire population.