Growing interest in cryptocurrencies in Africa

Growing interest in cryptocurrencies in Africa
Written by Arindam
Growing interest in cryptocurrencies in Africa

The popularity of cryptocurrencies has been increasing around the world. Governments in many countries are considering whether they should legalize cryptocurrencies. Plans are being made in African countries regarding digital currency. The Central African Republic recognized bitcoin as a currency last month. With this it became the second country to do so. Prior to this, only El Salvador had accepted bitcoin as a currency.

There is also a growing number of countries launching central bank digital currencies (CBDCs) in Africa. In this episode, Uganda plans to launch a CBDC. Andrew Kawere, director of the Bank of Uganda, told Reuters that studies are being conducted to decide whether to launch a CBDC and what the policy should be. Nigeria’s Central Bank last year barred local banks from facilitating cryptocurrency-related transactions. After this Nigeria launched a digital currency called eNaira. The President of Nigeria had said about this that the increase in the use of CBDC and its associated blockchain technology could increase GDP by about $ 29 billion over the next 10 years.

The cryptocurrency market in Africa grew nearly 1,200 percent last year, according to data from blockchain data platform Chainalysis. In Africa the use of cryptocurrencies is growing rapidly in Kenya, Nigeria, South Africa and Tanzania. However, low internet penetration in other African countries could be a deterrent to the massive growth of cryptocurrency use in Africa.

Recently, the Central Bank of Ghana said that it expects to increase the number of people joining the banking system with its digital currency. The Bank of Ghana has stated the need to provide hardware wallet services for those who do not have access to the Internet and bank accounts. Ghana is planning a blockchain-based digital currency ‘eCedi’ to digitize its economy and curb corruption. Bank of Ghana Governor Ernest Addison said about digital currency, “The Bank of Ghana intends to introduce a CBDC as part of the digitization of the financial sector. This will help in financial inclusion and reduce cash flow in the economy. The cost associated with payments will also come down.” CBDCs are regulated by central banks and are similar to cryptocurrencies. It is built on a blockchain network. This makes transactions centralized and traceable.

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