Africa is poised to become the next hub for blockchain and cryptocurrencies. The continent has experienced significant growth of cryptocurrency-related activities, and more countries are opening up their doors to crypto innovations and investments; however, the growth has suffered a great deal of opposition from authorities through various regulations. Despite the pressure, though, there are more crypto exchanges, tokens and wallets across the continent.
South Africa is leading in blockchain and crypto activities in Africa and now has many blockchain-based startups, exchanges and wallets. The cryptocurrency community in South Africa is actively involved in growing the crypto market in the region. While the crypto community is thrilled by the new technology, authorities are finding ways to control these operations.
In 2014, the South Africa Reserve Bank (SARB) published information that hinders cryptocurrencies to be considered as valid legal tender. Despite the publication, more people continued to invest in Bitcoin BCH, Bitcoin Core (BTC) and other cryptocurrencies. Even when the South Africa Revenue Service started taxing cryptocurrencies in the country, cryptocurrency numbers kept on rising.
The crypto market in Kenya has seen exciting developments. From the creation of BitPesa to the recent innovation that allows mining companies to use solar panels to mine crypto, the country is increasing its crypto impact in Africa. Authorities in Kenya, however, have not been forthcoming in stating their stance in regards to cryptocurrencies. As reported previously, the country’s finance minister, Henry Rotich, was given two weeks back in July to decide the regulations for cryptocurrencies in the country. Several months have passed, and there is still no regulatory system in the country.
Uganda is catching up with Kenya, South Africa and Nigeria. Many citizens were unbanked for a long time before digital currencies were introduced to the country. Binance, one of the biggest cryptocurrency exchanges in the world, recently launched a platform in Uganda and, in the last few months, the exchange has had over 40,000 users register on its platform.
Bitcoin Trading Platform (BTN) thrives in Namibia
BTN has adopted know-your-customer and anti-money laundering requirements by the Bank of Namibia in order to provide crypto services in the country. The emerging marketplace wants to survive and create a healthy relationship with financial authorities despite the ban.
According to Tshuutheni Emvula, co-founder and CEO of BTN, the company wants to provide a safe and secure on- and off-ramp for crypto for the emerging crypto community in the country.
BTN wants to create an environment that enables business people and customers to stay digitally connected to the world. Emvula explains that it will take a long time before the company can entirely create such an environment. He states that the first step to attaining this dream is making it possible for individuals in the country to directly own cryptocurrencies.
BTN, which was launched in March of this year, terms its self as a non-speculative Bitcoin Core (BTC) marketplace. The platform does not work as an exchange; rather, it allows buyers to transfers local Namibian dollars to a BTN bank account number in exchange for BTC. The clients then get the crypto sent to an address of their choice, a process that can take up to 72 hours for clients to receive their digital assets.
BTN does not store or keep any BTC on behalf of users. The platform also does not open order books, which allow users to trade BTC with each other. This has enabled the company to provide crypto services despite the ban imposed in 2017. That ban prevents local shops from pricing or accepting cryptocurrencies in exchange for goods and service, but does not have specific penalties attached to it.
Emvula explains that their operations are well within the stipulated laws. He explains that the ban does not mention that people are not prohibited from trading cryptocurrencies. He hopes their crypto space in the country will grow to allow the diversity that comes with the new technology.
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The Africa blockchain ecosystem continues to grow in the last days, with some areas finding new ways to apply blockchain technologies, while others are looking for ways to regulate the ecosystem.
Solar energy to power crypto mining in Kenya
Bithub Africa, a blockchain-based start-up, has set out to save the environment while mining cryptocurrency. The company, which was formed by John Karanja to dispel the myths that cryptocurrency mining is degrading the environment, has found a way to harness solar power for use in mining cryptocurrencies. Due to the high electricity consumption, heat emitted by the mining machines and the noise associated with the entire process, activists are speaking against cryptocurrency mining and claim that, in the coming days, crypto mining will have a significant effect on the environment.
In an interview news.bitcoin.com, Karanja explained how the solar panel project works and how it has the potential to transform the crypto mining sector. He explained that by using the solar energy largely available in Africa, mining companies would be able to save the environment while cutting down on mining cost.
The solar project comprises of a simple setup that you would find in a standard home. It includes a 200-watt solar panel, which is connected to a charge controller that is linked to a battery. Energy is transmitted from the battery to an inverter, which transforms direct currency into an alternating current that is in turn used in the mining computer.
The use of solar plans has increased in all African countries as they have proved to be more reliable for most communities. Karanja believes that not only will solar power help mining companies protect the environments around them, but also be able to evade the high electricity rates charged by authorities.
Karanja acknowledges that solar mining projects need more work to solve the shortcomings around using solar energy. Some of the issues include challenges having to halt operations on cloudy or rainy days.
Since its launch three years ago, Bithub Africa has worked to increase blockchain adoption in Kenya and other countries across Africa. The company also develops blockchain-based solutions for clients in the energy sector and financial services.
Africa Digital Assets Framework hopes to harmonize blockchain standards in Africa
The African Digital Asset Framework (ADAF) officially began its project on November 2. It aims to build a compliance-focused, cross-border blockchain that will link together African nations and Africans living abroad, easing everything from international payments to investments.
In the last few years, a few people have focused on evangelizing on, and using, blockchain technology. This has encouraged crypto cross-border transactions and on peer-to-peer networks. Due to an increase in blockchain and cryptocurrency activities among countries, experts believe African governments should establish and coordinate clear guidelines that would unlock blockchain’s full potential to smooth transactions across borders.
The ADAF exists to ensure that some neutral standards and regulations could govern the cryptocurrency space in Africa. According to the co-founder of the ADAF, Felix Macharia, Africa stands to gain a lot if countries start enacting legislation, standards and regulations that are in line with the new reality.
In the long run, ADAF wants to make things easy for African start-ups and governments by building a blockchain that embeds compliance with financial regulations across different jurisdictions.
The ADAF’s efforts are backed by the state members of the African Development Bank, ambassadors from the African Union (AU), as well as tribes across the continent. These entities advise ADAF while acting as liaisons with their home organizations.
In addition, ADAF hopes to increase collaboration and exchange between African countries. They hope to help the countries increase digital ownership and to create an exchange of value through digital economies. This, they expect, will not only happen with people in Africa, but also with Africans located in other continents.
Macharia also explained that the ADAF would include a multi-lingual interface that will allow policymaker, individuals, civil societies and key individuals in financial sectors to weigh in on suggested solutions and standards. He hopes the organization’s efforts will create a long-lasting crypto ecosystem with partners all across Africa.
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Paxful, a peer-to-peer marketplace, is reportedly looking at the cryptocurrency market’s growth potential in East Africa. The startup has already set up shop in Rwanda, ventured into Kenya, and has grown over the last three years into a global peer-to-peer crypto marketplace. It reportedly handles $15 million in crypto transactions, BTC in particular, per week from across the world. This rapid expansion has solidified its place among major reputable crypto players and offers enhancements in both security and efficiency.
Paxful has over 1 million active monthly users from around the world. This is because it has partnered with popular payment platforms such as PayPal, Western Union, Amazon Gift Cards and iTunes Gift cards.
Paxful’s entry into the East African scene is at a time when crypto penetration in Africa is at an all-time high. According to recent studies, one in three Kenyans owns a crypto wallet. Additionally, Kenya’s M-PESA system, a mobile phone-based money transfer and micro-financing service, recently announced the launch of its own crypto device. This will make it convenient for Kenyans to buy and sell cryptos on peer-to-peer marketplaces.
A tokenization drive has been initiated in Rwanda to help steer the crypto market. It has helped connect buyers and sellers to easily trade cryptocurrencies like BTC. This has been aided by the fact that the platform has no buyer fee and a minimal 1% seller fee in online shopping, which has attracted the attention of many online shoppers.
In Rwanda, Paxful is engaged in a project called #BuiltWithBitcoin in conjunction with the non-profit organization Zam Zam Water. The project aims to a school for 6- to 15-year-olds. Previously, the charity initiative funded launched a school in Bugesera in the Nyamata Sector for 3- to 6-year-olds. The aim is to promote charity within the crypto community and to improve and change lives for a better world, according to Paxful CEO Ray Youssef.
The developments in Rwanda and Kenya reflect the growing demand for investing in crypto in East Africa. In Kenya, for instance, more and more people are becoming more confident in dealing with cryptocurrency despite it being new and coming with a learning curve. Most people have come to accept its plethora of benefits. It offers massive wealth distribution globally as well, and presents financial freedom to individuals.
Crypto ventures have the potential to be the initiator of many emerging fundamentals of economic growth in the East African region if the right balance is found.
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Kenya may likely be moving towards tokenizing its economy to solve the alarming rate of corruption and unemployment in the country, following suggestions made by Bitange Ndemo, chairman of Kenya’s Distributed Ledgers and Artificial Intelligence task force, during a stakeholders meeting between the Information and Communication Technology Ministry (ICT) and private sector, The Star news outlet reported.
Kenya has taken a keen interest in blockchain technology and remains one of the African nations at the forefront of the technological revolution. The Distributed Ledgers and Artificial Intelligence task force was established by the government in March to understand the technology and find ways to integrate it to the public sector. It is made up of blockchain experts, Kenyan blockchain startups, researchers, legal practitioners, regulatory bodies, and other associated parties.
Ndemo is convinced that tokenizing the economy will turn the nation’s economy around. He said, “We must begin to tokenize the economy by giving incentives to young people to do things which they are paid through tokens that can be converted to fiat currency.” He believes that adopting crypto tokens can help increase employment in the country. Ndemo also outlined the importance of creating a digital currency that can be equivalent to fiat currency.
This is not the first time that the task force suggested the creation of a cryptocurrency. In July, the task force presented the idea of developing a central bank digital currency to the ICT. The project is yet to see the light of day, but Ndemo said that while they “are not very enthusiastic at the moment, of course it will come, but we first want people to understand use of tokens.”
Kenya is constantly seeking means to transform its economy with the blockchain technology, from land registries being placed on the blockchain to end land crisis to integrating blockchain into its voting system for a better election process.
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Several days after Kenya’s electoral agency decided to integrate blockchain into its voting system, the East African country is now reportedly preparing to launch its first blockchain-based cryptocurrency for value supply chain by the end of September.
According to the Daily Nation report, the cryptocurrency project, called TMX Global Coin, aims to solve the problems in the logistics industry in Africa.
TMX Global Coin was reportedly developed in 2017 as a decentralized platform that utilizes smart contracts to eliminate problems associated with both domestic and international import and export business.
Speaking to nation.co.ke, TMX Global CEO Anthony Njoroge pointed that the numerous reports and complaints arising from the supply chain sector especially in Africa, led to the development of Kenya’s own cryptocurrency. He said, “We are using blockchain technology to enhance cargo logistics business to have more open, transparent and democratized process using a decentralized system where all users are able to talk to each other on an open platform.”
With the TMX platform, customers can place their orders online and monitor the whole supply chain process. They can also review all of the required documentation before they start the trading. According to Njoroge, “The consumer as well gets to know the amount of money required through the different processes the cargo goes through and the estimated amount of time.”
Kenya’s landmark crypto project is set to launch by the end of September 2018, with a goal of gaining adoption in the trading sector by May 2019.
Kenya has recently turned to blockchain for help in its bid to boost its economic and political development. The East African country’s Independent Electoral and Boundaries Commission (IEBC) chairman Wafula Chebukati announced that the government is eyeing distributed ledger technology (DLT) to improve the efficiency and transparency of Kenya’s electoral system.
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