The International Monetary Fund (IMF) has recommended that several countries in the sub-Saharan Africa region create formal regulations for crypto-assets, as cryptocurrencies “could be used to illegally transfer resources out of the region".
This IMF warning comes two weeks after the bankruptcy of the FTX, noting that many people use cryptoassets to “commercial payments, but their volatility makes them unsuitable as a store of value“, noting that only a quarter of countries in the sub-Saharan Africa region have formal regulations for crypto assets, two thirds have implemented restrictions, six countries have banned them and only one is allowed by law: the Central African Republic, the first African country to designate Bitcoin as a legal tender.
That note is drawn up by three economists from the IMF’s Africa Department, as the collapse of the world’s third-largest cryptocurrency exchange triggered a precipitous drop in prices for Bitcoin, Ethereum and other major cryptocurrencies and renewed calls for regulation in the sector, to protect consumers.
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The context of urgency in regulating the sector was reinforced last Tuesday, the 29th, with the declaration of bankruptcy of yet another giant of crypto assets, the blockf🇧🇷 The platform is known in this universe for offering cryptocurrency-backed loans to investors without credit checks, as reported by the specialized publication Livecoins.
"Regulating a highly volatile and decentralized system remains a challenge for most governments, requiring a balance between minimizing risk and maximizing innovation.“, can be read in the communiqués of economists Habtamu Fuje, Saad Quayyum and Tebo Molosiwa.
Still in the context of Chainalysis data, the three IMF economists refer that “Africa is one of the fastest growing crypto markets in the world", but "remains the smallest” in operations, with cryptocurrency transactions peaking at 20 billion per month by mid-2021. South Africa, Nigeria and Kenya have the highest number of users in the region.
