One of the world’s fastest-growing markets for cryptocurrencies, the African market is being urged by the International Monetary Fund (IMF) to undergo greater regulation, as reported by Cointelegraph.
According to Cointelegraph, the monetary fund cited the collapse of FTX and its impact on cryptocurrency prices as one of the reasons why countries in the region should embrace regulation, saying that it is “prompting renewed calls for greater consumer protection and regulation of the crypto industry.”
The authors further noted that “risks from crypto assets are evident” and “its time to regulate” to maintain a balance between minimizing risk and thus, maximizing innovation.
“Policymakers are also worried that cryptocurrencies can be used to transfer funds illegally out of the region and to circumvent local rules to prevent capital outflows. Widespread use of crypto could also undermine the effectiveness of the monetary policy, creating risks for financial and macroeconomic stability,” the publication further stated.
According to data from analytics company Chainalysis, the value of the African cryptocurrency market increased by more than 1,200% between July 2020 and June 2021, with high adoption in Kenya, South Africa, Nigeria, and Tanzania, Cointelegraph further noted.
Ghana is reportedly testing a central bank digital currency, as Cointelegraph has reported (CBDC). The country’s initiative, according to Kwame Oppong, a senior executive at the Bank of Ghana, aims to promote financial inclusion. Ghana has the potential to reach levels of cryptocurrency adoption comparable to those of Kenya and Nigeria, which came in 11th and 19th place respectively in Chainalysis’ Global Crypto Adoption Index, Cointelegraph further noted.
(With insights from Cointelegraph)