Blockchain and Cryptocurrency in Africa

PREFACE

African countries are no strangers to the use of digital solutions for money transfers, nor to the 
rapid implementation of such technologies. It is often said that the pervasiveness of mobile 
telecommunication usage in Africa, enabled the continent to leapfrog many first-world countries. 
Mobile phone usage grew from less than 3% to 80% in under a decade. 
There is already an abundance of local mobile and e-payment platforms that have seized this as an 
opportunity to develop innovative ways to reduce the friction associated with transferring money 
across the continent. An example is Kenya’s M-Pesa, which has been around since 2007. The platform, 
which allows customers to send and receive money via mobile phone, already handles transfers of more 
than 25% of Kenya’s GNP, leading to greater consumer confidence in financial technologies. 
Sub-Saharan Africa is also reported to have the second highest population of unbanked adults in the 
world, at about 350 million people, or 17% of the global total. Reportedly, two thirds of Sub-Saharan 
Africans do not have a bank account. Despite this, a high percentage of migrant work, both within and 
between African countries, results in a disproportionate need for remittance mechanisms outside of 
traditional banks. Foreign remittance remains a primary source of income for many African communities 
and households, with countries like Lesotho purportedly attributing almost a third of their GDP to 
remittances from abroad.
These, amongst many other factors, create the ideal environment for new ways of moving value, and 
present many of the challenges that distributed ledger solutions aim to solve. This also presents the 
potential for greater socio-economic inclusiveness, such as through enhanced financial security.
So to what extent has blockchain and cryptocurrency been embraced in Africa? The results are mixed. 
Whilst the private sector is blazing ahead in many countries, governments have been apprehensive and 
reserved, and in some instances unreceptive. Countries such as Zimbabwe and Namibia have reportedly 
begun with a hard stance, whilst Mauritius is a regional frontrunner. The regulatory sandbox created in 
Mauritius, for instance, demonstrates a progressive take on the general economic benefits that could 
follow a friendly, and even incentivised, approach to cryptocurrencies, This creates another dimension 
for the potential for African countries to develop regulations around blockchain and cryptocurrency, 
with an intention to incentivise foreign direct investment.
This guide summarizes the latest and key developments taking place in selected African jurisdictions 
in respect of blockchain and cryptocurrency, focusing on current regulatory approaches. This guide also 
provides a comparative assessment of the stance adopted by such regulators, with a view to providing 
a better understanding of the opportunities and challenges associated with the use of this technology
in Africa

COUNTRY PROFILES

1. Botswana
• The Bank of Botswana has not released any regulation on cryptocurrencies or the use 
of blockchain technology and has reportedly stated that it currently has no intention of 
regulating cryptocurrencies.
• The XinFin Organisation, a non-profit organization which liaises with different international 
governments to reduce the existing gap in global infrastructure, met with Botswana 
government officials in 2017 to discuss the potential use of blockchain technology in the 
infrastructure industry. Despite this, Botswanan government officials were quoted as being 
unsure about the use and benefit of cryptocurrency and blockchain technology in their country.
• Currently, there seems to be no cryptocurrency exchanges in Botswana and as such, bitcoin 
trading is limited to private Whatsapp and Facebook groups. Bitcoin exchange, Belfrics, has 
announced plans to launch in Botswana, after its successful launch in Kenya in 2017.
• Despite the lack of regulation, there have been at least three blockchain based start-ups in 
Botswana:
• the Satoshi Centre, founded in 2014, acts as a blockchain hub and aims to educate business 
and government in Botswana about the disruptive technology
• Plaas, launched by the Satoshi Centre, aims to develop a mobile application that enables 
farmers and farming cooperatives to manage daily farming production and stock, on the 
blockchain
• Kgoboko, a financial ecosystem, aims to address the needs of the unbanked in emerging 
markets
• In addition, a private medical clinic in Gaborone, the Sharada Clinic, has apparently started 
accepting bitcoin, along with traditional payment methods, as compensation for treatment. 
The Sharada Clinic’s aim is to “achieve sustainability through accessible services.”
• Anglo American’s diamond unit, De Beers, which has a number of mines in Botswana, has 
launched the first industry-wide blockchain network to monitor the quality and origin of its 
diamonds. This blockchain based supply chain will monitor the diamonds from the moment 
they are mined to the point at which they reach the consumer. Bruce Cleaver, CEO of De Beers, 
stated that the purpose of using blockchain technology is because “a consumer should be able 
to know there is an accurate register of a diamond’s journey that assures its provenance and 
authenticity.”
There has been no litigation or court action reported in Botswana yet.

Blockchain and Cryptocurrency in Africa