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Central Bank of Kenya Still Warns Against Bitcoin and Hints at Regulations

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central bank of kenya bitcoin regulation

Since the first warning in 2015, the Central Bank of Kenya still maintains that cryptocurrencies are risky. The recent bitcoin dip from around 1.7 million to 1.1 million Kenyan shillings now makes the Kenyan regulator absolutely sure that you may lose all your money.

In a press briefing at CBK headquarters in Nairobi, Central Bank Governor Dr. Patrick Njoroge cautioned,

“If you want to invest in those things, know that it is a bubble of a kind. Be ready to lose all your money. It is dangerous.”

Kenyans are among the highest bitcoin holders in the world per capita according to a Citibank report. In addition, bitcoin and blockchain events held in 2017 suggest an increasing interest in digital currencies in the country. For instance, during a blockchain conference at Metta Nairobi last year, a young man had travelled all the way from Kisumu – a distance of 350km – to learn about bitcoin. The increasing enthusiasm surrounding cryptocurrencies could be an indication that a significant number of Kenyans posses different views from those of the CBK.

What Could Cryptocurrency Regulation Mean to Startups in this Space?

“We have been looking into bitcoin and what it means to those who may want to put in their money,” Dr Njoroge stated. This statement implies possible regulation plans by the CBK in the future. But what exactly does this mean?

“Bitcoin cannot be regulated; what you can regulate is what the companies that are involved in it do,” ICT Cabinet Secretary Mucheru said in a recent interview. Bitcoin is a decentralised currency which means that it is not controlled by anyone. Therefore, possible regulation by the CBK means controlling the activities of virtual currency exchanges, initial coin offerings (ICOs), and blockchain startups only.

Unfortunately, regulation can either be good or bad for startups. For example, BitPesa, an FX and B2B payments platform that was started in Kenya, no longer accepts new Kenyan users because of regulatory prohibitions. BitPesa was prohibited from maintaining accounts with local banks, which prevents the startup from processing payments in KES.

As a result, regulation can disrupt business activities for cryptocurrency and blockchain startups. However, friendly regulations can also increase cryptocurrency use as seen in Japan. Nikkei reports, “Japan is fast turning into the world’s top haven for cryptocurrencies […].”

We Accept Blockchain Technology

Most financial institutions around the world have accepted blockchain technology and the CBK has not been left behind.

“Blockchain technology is something that can be useful. We are not anti-technology. The issue is safety […],” the Governor said.

Whether the CBK is being objective or not in its warnings is a matter of personal opinion. However, before those regulations are laid down, crypto investors in Kenya will continue to enjoy a space where little to no monitoring is taking place.

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Mauritius to Receive World’s First Digital Asset Custody Regulatory Framework

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Digital Asset Custody Regulatory Framework

Mauritius is set to receive the first digital asset custody regulatory framework in the world, according to an announcement by the country’s Financial Services Commission (FSC). The framework will be effective from March 1, 2019.

The Digital Asset Custody Regulatory Framework

On September 17, 2018, digital assets were recognised as an asset class for Sophisticated and Expert Investors by theFinancial Services Commission, Mauritius (FSC). This was followed by the FSC issuing a consultation paper with the intention of getting public and stakeholder feedback on the proposed Custodian Services (Digital Asset) License regulation, as BitcoinAfrica.io reported in November 2018. The license enables its holder to offer custody services for digital assets.

“In revolutionising the global FinTech ecosystem through this regulatory framework for the custody of Digital Assets, my Government reiterates its commitment to accelerating the country’s move to an age of digitally-enabled economic growth. As an African country, we look forward to fostering further innovation and bringing more prosperity to the region,” said Pravind Kumar Jugnauth, Prime Minister of the Republic of Mauritius.

The regulatory framework will make Mauritius the first jurisdiction to create a “regulated landscape for the custody of digital assets. Holders of the Custodian Services (Digital Asset) License will equally have to comply with the applicable framework for AML/CFT, in line with international best practices,” the announcement read.

Support for the Regulatory Framework

Digital Asset Custody Regulatory FrameworkAccording to the FSC, the regulatory framework was created after consultations with the Organisation for Economic Cooperation and Development (OECD) on the regulation and governance of digital financial assets.

The Chief Executive of the FSC, Harvesh Seegolam, asserted: “The FSC is committed to implementing enabling frameworks which facilitate the development of the Mauritius IFC. We continue to collaborate with our international counterparts and stakeholders in introducing the appropriate regulatory mechanisms.”

The Bank of Mauritius is also in support of the regulatory framework. The bank’s governor, Yandraduth Googoolye, said: “The Bank of Mauritius is supportive of innovation in the financial services sector. Banks, depending on their respective risk appetite, are encouraged to develop business relationships with players in the Digital Assets segment.”

In light of this announcement, the custody services license regulation could create a thriving cryptoasset industry in Mauritius, which could help position the country as the go-to digital asset investment hub on the continent.

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Ghana’s SEC Mulls Over Cryptocurrency Regulation Framework

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Ghana Cryptocurrency Regulation

Ghana may soon receive a cryptocurrency regulation framework that would enable local bitcoin startups and exchanges to operate legally and without the threat of a potential regulatory crackdown.

Cryptocurrency Regulations in Ghana

According to News Ghana, the country’s financial regulator, the Securities Exchange Commission (SEC), is contemplating regulating cryptocurrencies. The commission is also considering licensing exchanges dealing with digital assets.

The news comes at the backdrop of the increasing number of fraudulent “crypto” investment schemes in the West African nation. Last year, over 100,000 Ghanaian investors were reportedly victims of a crypto investment scam called Global Coin Community Help (GCCH), which saw the investors lose 135 million Ghanaian Cedi.

The SEC Deputy Director General, Paul Ababio, said: “[…] Desist from dealing with these crypto entities. […] When you choose to go there you are on your own. We have adopted a wide range of changes on it and we are still doing our research and gathering information. We welcome any input that people might have to help us formulate a view on how we should deal with it in Ghana.”

The State of Cryptocurrencies in Ghana

GhanaLike many central banks in Africa, the Bank of Ghana has warned citizens against investing or transacting in cryptocurrencies due to the risk involved.

Frances Van-Hein Sackey, the Secretary to the Bank of Ghana, in response to the GCCH scam, wrote in a statement: “Anyone who does business with these entities does so at his or her own risk and the Bank of Ghana will not be liable for the refund of any deposit lost by a depositor.”

The current state of cryptocurrency in Ghana could, however, change if the SEC regulates the sector, according to a report by GhanaWeb. The SEC ‘Ababio said that Ghana’s Economic and Organised Crime Office (EOCO) is probing three cryptocurrency companies whose operators are currently missing in action.

“[…] It has been very preliminary and it is a new area of our work that we are going to be quite strong on as well. We will be coming out shortly with a lengthier statement and we will name some of these firms,” he stated.

Furthermore, Ababio revealed that some of these firms operate online and do not have a physical presence. These firms will be classified as illegally operating in the investment sector, he added.

What Could This Step by the SEC Mean for Ghana?

According to the CEO of Modulus, Richard Gardner, the move by Ghana’s SEC is commendable since regulation of the sector will provide standard rules for exchanges to operate by. He believes that this will make the industry viable while protecting consumers from exchanges that engage in market manipulation, abusive trading, and money laundering.

Gardner also noted that the public and private sectors should work together towards creating these regulations.

“The best way to regulate an industry, especially one which is so technical, is to bring together those involved in the private sector, along with those from the public policy side. Together, we can usually find a way to encourage industry growth while protecting consumers,” he said.

Regulations can have a substantial impact on the local bitcoin startup community. Hence, it will be interesting to follow these developments in the coming months as they could mean the difference between Ghana establishing itself as an African leader in the cryptocurrency space or not.

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Places in Africa Where You Can Find a Bitcoin ATM

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Places in Africa

There are currently over 4,000 Bitcoin ATMs across the globe. The majority of them are found in the United States. Africa, however, is also home to a handful of Bitcoin ATMs. In this article, you will discover the complete list of places in Africa where you can buy bitcoin with fiat currency using a Bitcoin ATM.

What Are Bitcoin ATMs?

Bitcoin ATMs function like traditional cash machines with the difference being that instead of cashing out money from your bank account, you can buy and, in some cases, sell bitcoin against local fiat currency.

Zimbabwe bitcoin atmIn 2013, Canada received the world’s first Bitcoin ATM in the Waves Coffee Shop in Vancouver. Then, the following year, the first machine in the United States was introduced at a cigar bar in New Mexico. Two months later, Coinme installed another one in Washington that came with a money transmitter license. Since then, the market for Bitcoin ATMs started to steadily grow.

Today, North America leads the pack with 71.9 percent of Bitcoin ATMs, followed by Europe with 23 percent and Asia with 2.3 percent while Australia and Africa have a meagre 1.3 and 0.1 percent respectively.

Bitcoin ATMs in Africa

In total, there are currently nine reported Bitcoin ATMs in Africa. 

South Africa

South Africa, as a leader in bitcoin adoption, is home to five cryptocurrency ATMs that are situated in Johannesburg, Pretoria, Nelspruit and Cape TownOn Average, these ATMs can dispense between a minimum to a maximum of 100  to 1 Million South African rands (ZAR). Most ATMs require identity verification if you are buying more than 5,000 rands.

Nonetheless, none of these ATMs dispenses cash as they operate only fiat-to-crypto. One bottleneck that might discourage people from using the ATMs is high fees ranging from 8 to 14 percent.

Kenya

Kenya received its first Bitcoin ATM last year in the country’s capital, Nairobi. Operated by the BitClub Network, it is also a fiat-to-crypto only ATM and a minimum of 500 Kenyan Shillings worth of bitcoin and litecoin can be purchased using the machine. 

Uganda

The Kampala Post Office hosts Uganda’s only Bitcoin ATM, which is run by KIPYA Bit2Big, a local Blockchain company. Ugandans can use the ATM to buy bitcoin, bitcoin cash and ether.

Zimbabwe

Golix, the first ever cryptocurrency exchange in Zimbabwe and one of the biggest in Africa, also runs a Bitcoin ATM.

Based in the Golix offices in Harare, this machine provides an essential service in a cash-strapped country since it allows buying and selling of bitcoin, bitcoin cash, and litecoin.

Djibouti

Somewhat surprisingly, there is also a Bitcoin ATM in Djibouti. The currently only Bitcoin ATM in the small East African country is located at Appart Hôtel Moulk.

Interestingly, the ATM’s operator, Group DOS, plans to introduce two more Bitcoin ATMs in Djibouti. Group DOS CEO, Eleyeh Issa, told BitcoinAfrica.io that two new Bitcoin ATMs will be set up in the coming weeks, one at the airport and one at a shopping mall. 

While Bitcoin ATMs tend to come with high fees, which makes them less appealing purchase option for larger investors, they do help to push adoption among smaller investors who want to get started with their first bitcoin investment.

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