Uganda Could Be 1st African Country To Regulate Digital Currencies. Bitcoin Africa: What To Expect In 2017
Some African countries have openly criticized bitcoin use. Others have taken a wait-and-see approach.
Bitcoin has enjoyed a rally in 2016 that’s beaten every major currency, stock index and commodity contract, surging 15 percent during Christmas week alone to more than $900, Bloomberg reported.
The last time it was at such levels was in January 2014, when bitcoin fell from its record price of $1,137 following the implosion of the MtGox exchange and tightening Chinese controls.
Today, bitcoin price hit $935.88 at 2:11 p.m. EST on the Bitstamp Price Index (BPI). The last time it traded at these levels was on Jan. 7, 2014. That was the day the now-defunct bitcoin exchange MtGox imploded, sending the price down to $785 by day’s end, Cryptocoin News reported.
The cryptocurrency is up 25 percent in value since the beginning of December. Bitcoin began 2016 trading at $428 on the BPI.
2016 was a landmark year for bitcoin in Africa, Olusegun Ogundeji reported for ITWeb Africa. The currency and its underlying technology, blockchain, has proven useful in several spheres, especially remittances.
Traditional money transfer service providers may face greater competition in the market in 2017. Sending 100 euros from Europe to Nigeria using Western Union, for example, will incur a 6 euro charge — fairly standard among other service providers. However, with bitcoin, sending 100 euros using Bitpesa in Kenya or BitX in South Africa, the exchange rate means more money on the receiving end and it gets to Nigeria faster, taking between 10 and 15 minutes.
In 2017, alternative platforms are likely to emerge and existing offerings, such as ICE3x, Chankura, Zenithincome and Nairaex will improve or expand operations to several African countries as awareness increases, ITWeb reported.
Several e-commerce sites including South African online marketplace BidorBuy and the Nelson Mandela Children’s Fund now accept bitcoin. However, merchant adoption is still low.
Bitcoin regulation in Africa in 2017 will likely allow e-commerce sites like Konga and Jumia to openly show interest in the digital currency without appearing to go against their government’s attitude toward bitcoin, according to ITWeb.
The U.N. held its first roundtable discussion on policy, legal, ethical and socio-cultural issues around the regulation of virtual currencies in Uganda. The event was put on by UNAFRI – the U.N. African Institute for the Prevention of Crime and the Treatment of Offenders.
Uganda could be the first African country to regulate digital currencies, ITWeb reported.
Regulation in Uganda, if it happens, may encourage Kenya to follow suit. Kenya has struggled to legalize Bitcoin since 2015, despite it being home to some of Africa’s most enthusiastic users.
Bitcoin transactions in Kenya increased more than 10 times in 2016, according to LocalBitcoins, the world’s largest online bitcoin trading marketplace.
Several bitcoin events were held there in 2016 including the Coalition of Automated Legal Applications. Blockchain technology is meant for Africa, stakeholders concluded, such as Peter Todd, Bitcoin Core developer and Vitalik Buterin, lead developer at Ethereum.
The Blockchain Africa Conference 2017 is scheduled March 1-3 in Johannesburg.
A surge of Nigerians entering the bitcoin market helped push up the price of a bitcoin as high as US$1,250 in Nigeria on Nov. 21, according to Bitx. The average global price was $740 at the time – except in India where it was about $890 due to the country’s demonetization process.
The surge came after a clamp down on several forex hoarders, ITWeb reported. Though the forex rate has dropped slightly, this type of situation is likely to recur.
If Nigeria’s Deposit Insurance Commission (NDIC) and stakeholders like the Central Bank of Nigeria bring about formal regulation, the digital currency will achieve legitimacy.
South Africa has the highest bitcoin use in Africa. A South African Llew Claasen heads the Bitcoin Foundation which helps shape global perception of the currency, ITWeb reported.
Claasen expects bitcoin adoption to grow in areas of savings, peer-to-peer payments and mobile PoS for informal vendors.
Nigeria and Zimbabwe ranked among the top 10 of 178 countries with the highest relative potential for Bitcoin adoption in 2014, according to London School of Economics author Garrick Hileman. They’ve kept these positions in 2016.
Bitcoin is a potential solution to address Zimbabwe’s ongoing currency woes, said economist Philip Haslam, co-author of “When Money Destroys Nations.”
Zimbabwean bitcoin startup BitFinance announced in December a new investment from angel investor Taurai Chinyamakobvu, according to Zimbabwean tech news site Techzim.