Fun

IMF Blog: Better Regulation of Africa’s Growing Crypto Market Urgently Needed

News Feed - 2022-11-24 06:11:20

IMF Blog: Better Regulation of Africa"s Growing Crypto Market Urgently Needed


A well-regulated African cryptocurrency market is needed in order to protect users as well as help countries stop bad actors from using digital assets to circumvent capital controls, the latest post on the IMF blog has said. The blog post reiterated the IMF’s belief that risks to a country are “much greater if crypto is adopted as legal tender.” Crypto’s Volatility Said to Render It an Unsuitable Store of Value


The collapse of the cryptocurrency exchange FTX and subsequent crypto market downturn once again highlights the need for better regulation of the industry, the International Monetary Fund (IMF) has said in its latest blog post. According to the blog, in Africa, where the crypto market is rapidly growing, urgent action is also needed in order to block or stop bad actors from using crypto assets to facilitate illegal activities.


As per the global lender’s latest blog post, only a quarter of countries in Africa’s sub-Saharan region formally regulate cryptocurrencies. However, in the Bretton Woods Institution’s latest post known as the “Chart of the Week,” it is stated that over two-thirds of countries from the region have implemented some restrictions.


Only six countries, namely Cameroon, Ethiopia, Lesotho, Sierra Leone, Tanzania, and the Republic of Congo have effectively banned crypto, the blog revealed. Zimbabwe, on the other hand, directed banks to stop processing crypto-related transactions.


While the authors of the Nov. 22 blog post did concede that “many people use crypto assets for commercial payments,” they insisted that crypto assets’ volatile nature makes them unsuitable alternative stores of value.


Wider Use of Cryptocurrencies Potentially Undermines the ‘Effectiveness of Monetary Policy’


Besides the volatility, the authors also claimed that African policymakers are concerned that crypto assets are being used to bypass countries’ respective exchange and capital controls, noting: Policymakers are also worried that cryptocurrencies can be used to transfer funds illegally out of the region and to circumvent local rules to prevent capital outflows. Widespread use of crypto could also undermine the effectiveness of monetary policy, creating risks for financial and macroeconomic stability.


Concerning the Central African Republic (CAR), which has already made bitcoin legal tender, the authors reiterated the IMF’s belief that such a decision places “public finances at risk.” The move by the CAR also contravenes the Economic and Monetary Community of Central Africa (CEMAC)’s treaty on cryptocurrencies.


Register your email here to get a weekly update on African news sent to your inbox:

Tags in this story bitcoin legal tender, crypto assets, crypto-volatility, Cryptocurrency, Economic and Monetary Community of Central Africa (CEMAC), financial stability, ftx, International Monetary Fund (IMF), Monetary Policy, store of value


What are your thoughts on this story? Let us know what you think in the comments section below. Terence Zimwara


Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route. Nigerian Web3 Startup Says Funds Are Stuck With FTX, Lays Off Employees AFRICA | Nov 17, 2022 Zimbabwean Central Bank Launches CBDC Consumer Survey AFRICA | Nov 11, 2022


Image Credits: Shutterstock, Pixabay, Wiki Commons, rafapress / Shutterstock.com Previous articleDeloitte: Metaverse Could Add $1.4 Trillion a Year to Asia’s GDP Next articleStudy: 6,100 Crypto ATMs Installed in 2022, Figure 3 Times Less Than in Previous Year Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItTony Hawk"s Latest NFTs to Come With Signed Physical Skateboards


Last December, the renowned professional skateboarder Tony Hawk released his “Last Trick” non-fungible token (NFT) collection via the NFT marketplace Autograph. Next week, Hawk will be auctioning the skateboards he used during his last tricks, and each of the NFTs ... read more.NFT Sales Volume Saw a Small Uptick This Week — Moonbirds, Mutant Apes Take Top Sales Fidelity Investments Launches Crypto, Metaverse ETFs — Says "We Continue to See Demand" Argentinian Securities Regulator Launches Innovation Hub to Discuss Regulated Crypto Investments Economist Predicts the Fed"s Response to Inflation Will Push Crypto Higher

News Feed

Meta to combat generative-AI abuse ahead of EU parliament elections
Savannah Fortis11 hours agoMeta to combat generative-AI abuse ahead of EU parliament electionsMeta outlines its strategy to combat the misuse of generative AI in content on its platforms ahead of the European Parliament
Saudi Arabia Open to Trading in Currencies Other Than US Dollar, Signaling a Shift Toward De-Dollarization
Saudi Arabia Open to Trading in Currencies Other Than US Dollar, Signaling a Shift Toward De-Dollarization After a 48-year relationship solely with the U.S. dollar, Saudi Arabia
Luno to Reinstate Deposit and Withdrawal Function for Nigerian Clients — Denies User Speculation
Luno to Reinstate Deposit and Withdrawal Function for Nigerian Clients — Denies User Speculation One of the African continent’s leading cryptocurrency exchanges, Luno, has
Ricardo Salinas Pliego Hints at Elektra Group Selling Bitcoin in Its Stores
Ricardo Salinas Pliego Hints at Elektra Group Selling Bitcoin in Its Stores Ricardo Salinas Pliego, president of the Salinas Group, owner of the Elektra Group stores, hinted at the
Gaming Giant Animoca Brands Reveals Ban Against Russian Users, Co-Founder Compares Russia to North Korea
Gaming Giant Animoca Brands Reveals Ban Against Russian Users, Co-Founder Compares Russia to North Korea Blockchain gaming firm Animoca Brands has revealed the company is breaking
Robinhood Begins Rolling Out Crypto Wallets to Select Customers
Robinhood Begins Rolling Out Crypto Wallets to Select Customers Trading platform Robinhood has begun rolling out crypto wallets to 1,000 customers. Users can send and receive their
William Suberg8 hours agoBitcoin rejects at 21-day trendline — How low can BTC price go?BTC price fails to protect the $30,000 mark after a brief resurgence, and Bitcoin traders are not confident of new highs.3779 Tota
Ethereum Price Breaks Out Of Symmetrical Triangle, Next Stop $3,400?
Este artículo también está disponible en español. The Ethereum pricehas just broken out of a key symmetrical triangle pattern, signaling a potential surge to new levelsab
Marcel Pechman9 hours agoCan Bitcoin repeat a 2017-like rally as dollar correlation reverses?The U.S. Dollar Index disconnecting from Bitcoin does not necessarily mean that the BTC price is about to experience a big rall
Rakesh Upadhyay7 hours agoPrice analysis 9/20: BTC, ETH, BNB, XRP, ADA, DOGE, SOL, TON, DOT, MATICBitcoin and other cryptocurrencies are likely to witness a pick up in volatility following the Fed’s rate decision on Se
Etoro CEO Yoni Assia on Reaching 12 Million Users and Why Cryptos Are a Gateway to Stocks 
Etoro CEO Yoni Assia on Reaching 12 Million Users and Why Cryptos Are a Gateway to Stocks  Yoni Assia is the CEO and founder of multi-asset trading platform Etoro. The brokerage
Ana Paula Pereira6 hours agoTexas is home to nearly 30% of all Bitcoin hash rate — FoundryAccording to Foundry’s data pool, Texas accounts for 28.5% of all Bitcoin hash rate in the United States.1180 Total views40 To