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IMF Recommends For More Crypto Regulation For Africa’s Crypto Market

The International Monetary Fund (IMF) is pushing for more regulation of Africa’s crypto markets, which are one of the world’s fastest-growing, according to the global institution’s blog on Nov. 22.

The International Monetary Fund said that the fall of FTX and how it affected the value of other cryptocurrencies was one reason why governments in the area should regulate. This is “prompting new calls for more consumer protection and regulation of the crypto business,” the IMF said.

Furthermore, the authors contend that “risks from crypto assets are obvious” and that “it’s time to regulate” in order to strike a balance between avoiding risk and boosting innovation. According to the October 2022 Regional Economic Outlook for Sub-Saharan Africa, “risks are much higher if crypto is used as legal cash.” This means that if governments accept crypto as a form of payment, it could hurt their finances.

According to IMF statistics, 25% of Sub-Saharan African nations have explicitly controlled cryptocurrency, with the other two-thirds imposing some limitations. Cameroon, Ethiopia, Lesotho, Sierra Leone, Tanzania, and the Republic of Congo, on the other hand, have already prohibited crypto assets, accounting for 20% of Sub-Saharan African countries. The region’s most active users are in Kenya, Nigeria, and South Africa.

The value of the crypto market in Africa grew by more than 1,200% between July 2020 and June 2021, according to data from the analytics company Chainalysis. Kenya, South Africa, Nigeria, and Tanzania all used cryptocurrencies a lot during this time.

Ghana is exploring a central bank digital currency (CBDC). According to Kwame Oppong, a Bank of Ghana officer, the country’s strategy seeks to promote financial inclusion. Ghana has the potential to reach crypto adoption levels comparable to Kenya and Nigeria, which placed 11th and 19th on Chainalysis’ Global Crypto Adoption Index, respectively.

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Jeewan Singh is CryptoShrypto’s content writer and a seasoned writer with over two years of experience in writing about Indian Securities Market. Jeewan's participation in Blockchain and Cryptocurrency started in late 2020, and he hasn't looked back since. The technical and economic outcomes of cryptocurrency are what spark his curiosity, and he keeps one eye on the market.


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