Even though many people link fears and skepticism when it comes to the potential usage of virtual currencies in Africa – because of the money laundering, tax evasion, and crime – more and more African countries are moving towards embracing cryptocurrencies. This helps them escape challenges with fiat money and mop up an extra value from informal markets dominating the continent.
The news comes from a new report by Global Risk Insights, in which it is said that there are numerous opportunities for the African countries to embrace cryptocurrencies. According to the report, “more states in Africa come to accept cryptocurrency in a technology-first approach to digitizing and diversifying” their markets.
The Global Risk Insights report also cites:
“This approach could enable African states to spearhead innovations such as block-chains for easier access to public services and digital currencies issued by central banks,”
So far, the blockchain tech that Bitcoin is built around has already been trialed in South Africa for use in financial transactions. The country’s central bank said that the technology can also help reduce the amount taken to complete transactions.
In Kenya, blockchain technology has already been deployed as a way to “enable credit scoring of small businesses” and allow them access to microloans through their mobile phones – all coming from a partnership between IBM and the local startup Twiga Foods.
The interest in blockchain and cryptocurrencies in Africa, on the other hand, is spread in different markets, from Kenya to Zimbabwe and into West Africa. According to the report, the “most important factors that have influenced the development of Africa’s cryptocurrency market is its large informal” sector.
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