The collapse of FTX is one of the reasons why countries in the region should adopt regulation, according to the monetary fund. As the industry develops, the IMF calls for tighter crypto regulation in Africa.
The global institution blog reported on November 22 that the International Monetary Fund (IMF) is calling for increased regulation of Africa’s crypto markets, which are one of the world’s fastest-growing markets.
The monetary fund cited the collapse of FTX and its ripple effect on cryptocurrency prices as one of the reasons why countries in the region should embrace regulation. This collapse is “prompting renewed calls for greater consumer protection and regulation of the crypto industry.”
Besides, that’s what the creators contend “gambles from crypto resources are obvious” and “now is the ideal time to control” to track down a harmony between limiting gamble and boosting development. According to the piece, which is based on the October 2022 Regional Economic Outlook for sub-Saharan Africa, “risks are much greater if crypto is adopted as legal tender,” accepting cryptocurrency as a means of payment poses a threat to public finances.
Additionally, the publication noted:
“Policymakers are additionally stressed that cryptographic forms of money can be utilized to move subsidizes wrongfully out of the district and to avoid neighborhood rules to forestall capital surges. Cryptocurrency use could also make monetary policy less effective, putting financial and macroeconomic stability at risk.
The data provided by the IMF indicate that while two-thirds of countries in sub-Saharan Africa have implemented some restrictions, only 25% of those nations have formally regulated cryptocurrency. However, 20% of sub-Saharan African nations, including Cameroon, Ethiopia, Lesotho, Sierra Leone, Tanzania, and the Republic of Congo, have already outlawed crypto assets. South Africa, Nigeria, and Kenya have the most users in the region.
According to data from analytics company Chainalysis, the crypto market in Africa increased in value by more than 1,200 percent between July 2020 and June 2021, with high adoption in Kenya, South Africa, Nigeria, and Tanzania.
According to a report, Ghana is testing a digital currency issued by the central bank (CBDC).An executive at the Bank of Ghana, Kwame Oppong, claims that the country’s initiative aims to increase financial inclusion. Ghana has the potential to reach levels of crypto adoption comparable to those of Kenya and Nigeria, which ranked 11th and 19th, respectively, in the Global Crypto Adoption Index produced by Chainalysis.