Interest in cryptocurrency is growing steadily in Africa. Some economists say it is a disruptive innovation that will blossom on the continent. But can a continent facing a crisis with antiquated banking technologies, low rate of financial inclusion, poor confidence in the banking system, and high remittance costs become the new battleground for blockchain or cryptocurrency-centered settlements?

The continent’s rapid technological progress can be seen in the growth of mobile phone use, both as a means of payment and as a bank account. With more than 100 million active users of mobile money, transacting about $2.1 billion each year, Africa is a global leader in mobile-based financial settlements.

Let us take a closer at the major countries of Africa and the progress that they have made in their cryptocurrency infrastructure.


South Africa

In South Africa, cryptocurrencies are growing in popularity. Google Trends shows that the highest number of bitcoin searches in the world occur in Southern Africa. About 50 percent of South Africans plan to put some into cryptocurrencies. The economy, Africa’s most modern, is home to a number of digital currency exchanges – including Luno, which operates in 40 countries worldwide – allowing people to buy and sell digital coins like bitcoin in the local Rand currency.

The South African Reserve Bank (SARB) has pilot tested an inter-bank settlement system code-named Project Kohka, which runs on the Ethereum blockchain. Aiming to speed up payments, the system is understood to have performed “exceedingly well” during simulated trials for real-time gross settlements between banking institutions.


In 2014 Nigeria surpassed South Africa as the continent’s biggest economy, with a GDP of $400 billion. But enormous inequalities, corruption, and illicit financial flows still persist in Africa’s most populous nation. The blockchain/cryptocurrency sphere in Nigeria is trading under caution from central bank governor Godwin Emifiele who has compared cryptos “to a gamble.” The Nigerian Parliament has, however, instituted an investigation into the merits and demerits of adopting bitcoin as a means of payment.

Nigerians account for the world’s third largest holdings of bitcoin, as a percentage of Gross Domestic Product, after Russia and New Zealand. Ignoring warnings from financial regulators, a flurry of start-ups in the country have taken to initial coin offerings, a way used by emerging companies to raise money by issuing new digital coins to the public. There appears to be a silent admission by regulatory authorities that cryptocurrencies – and the blockchain technology that underpins them – are in the Nigerian economy for the long haul.

Egypt, Morocco, And Algeria

The evenness between the three North African countries – some of the continent’s leading economies – to outlaw cryptocurrencies in their particular economies is galvanized by their common religious beliefs. Under Islamic law “commercial and trade transactions (should) be governed by contracts and clear rules.” Bitcoin does not say, religious leaders.

In Egypt, the Financial Regulatory Authority denied it had given the green light for a digital currency exchange called Bitcoin Egypt to set up shop in the country. The Central Bank of Egypt has said the country’s banking system deals “with official currencies only, and never deal in any virtual currencies.”

The situation in Egypt, Africa’s third-largest economy, broadly reflects what is happening in Morocco and Algeria. The Moroccan foreign exchange authority, The Office des Changes has called cryptocurrencies “a hidden payment system not backed by any financial organization”. In Algeria, it is illegal to invest in or hold any digital coins. A Finance Bill that is waiting to become law will punish crypto investors “in accordance with the regulations in force.”



Several weeks have passed since the Kenyan parliament in July tasked the country’s Financial Ministry to come up with a determination whether or not to regulate bitcoin and other cryptocurrencies. In April, the Central Bank of Kenya warned banks against dealing with companies involved in the trade of virtual currencies – or that the banks themselves invest in digital coins at all. The central bank reduced bitcoin to a pyramid scheme.

In March, President Uhuru Kenyatta set up an 11-member team to investigate the distributed ledger technology, particularly it’s potential use in eliminating inaccuracies within the land registry. Mr. Kenyatta’s government has in the past prevented bitcoin exchanges to make payments through Mpesa, a mobile money service offered by cellular network provider Safaricom, which is 35 percent owned by the government.