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The State of Bitcoin in Botswana

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Bitcoin in Botswana

Botswana may not be the first country that comes to mind when thinking about bitcoin and blockchain innovation but the Southern African country is home to a small but active bitcoin economy that encompasses startups, meetups, a blockchain hub, and bitcoin trading WhatsApp groups.

To receive local insight into the current state of bitcoin in Botswana, Bitcoin Africa spoke to Satoshicentre founder and Botswanan bitcoin thought leader Alakanani Itireleng.

The Local Bitcoin Community

According to Ms. Itireleng, the introduction of bitcoin cloud mining and multi-level marketing schemes has been a key driver of bitcoin adoption in Botswana. There has been a lot of interest in these types of make money online schemes in Africa and this interest has also helped to boost bitcoin awareness in Botswana. 

Meetups held by the blockchain hub, Satoshicentre, have also helped to spread awareness about the benefits that digital currencies and blockchain technology can provide.

Bitcoin Trading in Botswana

There is currently no bitcoin exchange in Botswana and at the time of writing, there was only one offer on the global peer-to-peer bitcoin exchange LocalBitcoins to buy bitcoin using the Botswanan pula. Not surprisingly, therefore, most bitcoin trading occurs through bitcoin trading WhatsApp groups and in dedicated Facebook groups.

Some Botswanan bitcoin users prefer to use South African exchanges such as AltcoinTrader, which allows direct bank deposits, and those with friends or relatives in South Africa often use Luno to buy and sell cryptocurrency.

According to Ms. Itireleng, Botswana is still in search for a local bitcoin exchange that can meet local demand. Bitcoin exchange, Belfrics, which recently launched in Kenya, has announced that it would launch in Botswana as well at some point in the future. Having a local exchange would likely boost adoption and help to grow Botswana’s bitcoin economy.

The Bitcoin Startup Scene

Currently, there are three notable blockchain startups in Botswana. The Satoshicentre, a blockchain hub run by Ms. Itireleng, Plaas, a blockchain-based farming platform provider, and Kgoboko, a blockchain-powered financial services platform for the unbanked launched by IndieStudio Africa.

The Satoshicentre is a blockchain hub that was founded in 2014 by Ms. Itireleng with the mission “to provide disruptive Innovations with the sole purpose of changing the way we carry out our daily routines and processes with ease through the help of the Blockchain.”

Plaas is a startup launched under Satoshicentre, founded by Alakanani Itireleng, which is working with various blockchain experts around the world, including BitcoinTracker and Bitsoko, to develop a mobile application that enables farmers and farming cooperatives to manage their daily farming productions and stock on the blockchain.

IndieStudio Africa launched Kgoboko, a financial services ecosystem that aims to address the needs of the unbanked in emerging markets. The startup aims to solve the problem of restricted access to funding and investment as well as low uptake and awareness of cryptocurrencies in Africa.

Cryptocurrencies Remain Unregulated

Currently, the Bank of Botswana (BoB) has not issued any regulations in regards to cryptocurrencies or the use of blockchain technology. According to Ms. Itireleng, the central bank has stated that it currently has no intention of regulating or studying cryptocurrencies. However, she believes that as more blockchain startups will launch in the country and more businesses will start to accept digital currencies, the regulator will be forced to take a closer look at this new technology.

When talking about bitcoin in Africa, Botswana should not go unmentioned. While the country does not have the sizable bitcoin economies of Kenya, Nigeria, and South Africa, it has developed an active bitcoin community that is working on local blockchain solutions and is spreading cryptocurrency awareness. 

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A Blessing and a Curse: Cryptocurrency Opens Doors to Both Investments and Scams in SA

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Investments and Scams in SA

Over the past year or so, cryptocurrencies have certainly made their mark across the globe. From the spread of information to the introduction of various rules and regulations, country after country appear to be building up their own ideas on just how to handle the cryptocurrencies gracing the world today. South Africa is certainly no exception. More and more businesses within the region are starting to accept cryptocurrencies and as mass adoption seems to become more and more likely, crypto enthusiasts are starting to rejoice at the thought that SA could soon be a region ready to utilise these currencies to their fullest.

However, with all good things come the bad and for cryptocurrencies, that means scams. Here, we’re taking a look just what cryptocurrency adoption could mean for South Africa.

Cryptocurrency Capital

For those living in South Africa, the cryptocurrency revolution has certainly been leaving its mark. Most surprisingly, perhaps, is the simple fact that it isn’t just financial experts that are taking an interest in these coins here. In fact, everyday use of these digital assets has been rife.

South Africa has been following cryptocurrency adoption for quite some time now and as a result, more and more businesses are beginning to boom with improved access to funds that might otherwise not have been available in fiat form. A huge variety of businesses have been picking up on this trend. Online banking, trading, gambling, sports betting and even physical stores are capitalising on these trends. In fact, sportsbooks were some of the very first companies to start to accept bitcoin, some opting for even bitcoin-exclusive payment options, and even schools are now accepting crypto to help the fulfillment of education gaps. With tourism and South African trade also benefiting from the spread of crypto, South Africa has truly been capitalising on cryptocurrencies in a way that no other country in the world has dared try.

For this reason, it’s clear that the interest in cryptocurrency use goes far beyond the experts and instead, often emanates from the residents. As a result, the South African Treasury introduced taxation on cryptocurrency funds as a new, yet traditional form of bringing in capital for the country. From April 2018, it was made clear that any profits made by cryptocurrencies for companies and businesses operating in South Africa would have to come under taxable law and the South African Revenue Service (SARS) had even offered to provide support and advice to those who weren’t clear on what this would entail.

In July 2018, however, amendments were proposed via the Taxation Laws Amendment Bill (TLAB) that would change the definition that digital assets were taxable financial instruments. They would become a financial instrument by the Income Tax Act standards and a financial service by the VAT Act standards, meaning that all crypto trades would then be exempt from VAT. These proposals, should they be successful, could encourage more and more businesses to pick up cryptocurrencies as a form of payment and further integrate these digital coins into everyday life in SA.

South African Scams

south africaHowever, while things seem to be going well, for the most part, there are of course negatives to take into consideration and unfortunately, those negatives are manifesting themselves in scams. The introduction of SAFCOIN – a cryptocurrency designed entirely to bring more and more South African’s safely into the world of crypto – has led to a high volume of investors and spenders entering the markets which, for hackers and scammers, is a new found gold mine.

One of the most recent and perhaps more terrifying scams for a low of Africans is the Nigerian Bitcoin Scam in April 2018. This scam saw thousands of people lose their entire life savings in some cases after a bitcoin trading company disappeared with practically billions of Naira. With both offices in Kenya and Nigeria both seemingly disappearing overnight, people were left confused, poor and scammed. March also saw a cryptocurrency scam, with around 28,000 virtual currency investors falling victim to BTC Global’s theft of over $80 million worth of cryptocurrencies.

These scams have opened up SA’s eyes to the potential risks associated with cryptocurrencies, though the debate is still rife as to whether this will actually make a difference as to how quickly and how eagerly they are adopting virtual currencies within the region. With further education and awareness, this could potentially become much safer but only time will truly tell.

What Do The Experts Think?

While Africa isn’t often thought to be at the forefront of any technological innovations, cryptocurrencies could be the market to change that – at least according to Rakesh Sharma, a business and technology journalist. Claiming that Africa could be the next leading frontier for cryptocurrencies, he said that SA “may be set to steal a march over other markets” namely due to the fact that Africa is suffering from such high inflation of their usual fiat currency. With an unstable economy, more and more people are likely to reach for a decentralised alternative to ensure that their funds are kept safe from the potential of corruption or disaster from central banks.

CEO of Liquid Crypto-Money, an SA cryptocurrency consulting firm, also predicted that Africa is likely to have government-issued cryptocurrencies in the near future. As a potential solution for governments seeking an answer to catastrophic inflation rates, cryptocurrencies aren’t to be ignored but with debate still suggesting that cryptocurrencies in Africa are dependent on speculation and an uncontrollable volatility, it’s difficult to determine just where things could go in the future.

As with most cryptocurrency markets, it’s undeniably complicated to determine whether or not South Africa could really be the country to adopt cryptocurrencies on a mass and stable scale. The potential they could hold, however, is promising enough for most and with government support and treasury regulation, the potential risks could, in time, be reduced.

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Almost a Quarter of High-Tech Consumers in South Africa Now Own Cryptocurrency

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High-Tech Consumers in South Africa

A new study titled “Digital Lifestyle Measure report” conducted by MBIT found that 23 percent of high-tech consumers in South Africa own at least one cryptocurrency, with bitcoin being the most common holding. 

New Report Shows High-Tech Consumers Hold Crypto

In the”Digital Lifestyle Measure report” report, each level of tech consumer (high, medium, and low) was grouped according to DM segmentation. A high-tech consumer is identified and tagged as a “DLM5 consumer”, and for the low-tech consumers, a “DLM1 consumer” was used. 

To place each of the participants in the right groups, the survey made use of a question and answer (Q&A) method. Each person was categorised according to how well they were able to answer the provided questions. The questions mostly focused on their private digital lifestyle and technological gadgets they own and can operate well.

The result of this survey shows that only six percent of the low-tech consumers (DLM 1) own crypto, while 23 percent of high tech consumers own cryptocurrencies. The remaining percentage was then shared in the order: DLM 2: seven percent, DLM 3: twelve percent, and DLM 4: eight percent.

cryptoThe report also stated that of the DML5 population, about 42 perfect of them are of the notion that cryptocurrencies are here to stay. Same goes for 30 percent of the DLM 4 consumers group.

Conversely, 41 percent of the low-tech consumers (DLM1 consumers) did not know what cryptocurrencies are all about, according to IOL

From the DLM 3 consumer group, about 34 percent of them cannot say what the future looks like for cryptocurrencies but 26 percent of them claimed cryptocurrencies to be the “future of financial transacting.”

The report has further shown that high tech consumers who are continually paying for something electronically, are more likely to buy crypto in the long run.

Based on the google trends data, South Africa currently has the highest levels of interest in bitcoin across the world. Hence, it should come as no surprise that tech-savvy South Africans are the ones investing in digital currencies and tokens. 

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Ecobank Report: Most African Regulators Are Taking a “Wait and See” Approach to Cryptocurrency Regulation

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African Regulators

While there has been a substantial increase in the adoption of cryptocurrencies in Africa compared to three years ago, there has been minimal effort from African countries to try and regulate cryptocurrencies despite their increased use in various African nations according to a new report by Ecobank.

Ecobank tracked “the current state of cryptocurrency regulation in all markets in Sub-Saharan Africa” through the regulatory responses that have been issued by central banks or financial regulators. In the report, the pan-African bank found that most African regulators are taking a “wait and see” approach when it comes to cryptocurrency regulation.

The report stated: “Many African governments and regulators recognise both the risks and the potential positive impacts of cryptocurrencies, and some also appreciate the difference between cryptocurrencies and the underlying blockchain technology. But they have been reticent in authorising cryptocurrency transactions, and mostly remain apprehensive about the potential risks. African countries appear to be looking to their neighbours to regulate and innovate first, and learn from their mistakes, rather than being the first mover.”

The reported noted that the main reason why African governments were being skeptical about licensing the use of cryptocurrencies was their citizens getting overexposed to cryptocurrency investments and there being a future crash that would cause a ripple effect in the broader economy.

African Regulators’ Stance

African RegulatorsOut of the 39 jurisdictions surveyed, more than 21 countries in the region are yet to make a public declaration on the use of cryptocurrencies.

So far, there have been three countries that have taken a stance on cryptocurrency. Namibia tops the list having banned the commercial use of digital currencies. However, South Africa and Swaziland are the only two countries in Sub-Saharan Africa that have adopted “a generally favourable and permissive stance, but without full legality”.

The remaining countries fall somewhere in between and “refuse” to directly regulate cryptocurrencies claiming that bitcoin and other digital currencies “operate in the grey area between legality and illegality” and have issued warnings to their citizens and investors against using or investing in them. The bank also noted that conversations regarding the speculative nature and instability of cryptocurrency prices have overshadowed their benefits and the potential they bring.

The bank went ahead to note: “Unfortunately, the spectacular rise and fall in the traded value of cryptocurrencies has drowned out broader discussion on the potential benefits this new technology could bring. The transformational impact that could be delivered by tokenising products and services on the blockchain has been compared to that of the Internet. Crypto tokens and currencies could enable consumers to transact instantly, cross-border and for free, provide them with KYC-compliant digital IDs, and incentivise their behaviour and change the way they engage with governments & service providers.”

Ecobank will continue to track cryptocurrency regulation in Sub-Saharan Africa and provide regular updates that will reflect the regulation progress in the African nations.

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