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African Regulators and Cryptocurrencies: The Future Relationship

 4 min read / 

The emergence of cryptocurrencies has provided society with, amongst other benefits, much-needed economic flexibility in handling transactions across different financial markets and time zones. The same can’t be said of the African market which is known for its slow growth in the areas of infrastructures, innovations, and technology.

There is no need to be surprised if the continent still hasn’t caught up with the cryptocurrency wave. Such is to be expected from a continent whose financial regulators are so careful to not allow anything at all to tamper with their control of the market let alone a virtual currency. They hold a very tight fist over the market – cryptocurrency is seen as breaking the ranks, something the financial regulators aren’t in support of.

Rejecting Cryptocurrencies

Initially, lots of financial powerhouses in Africa seem to detest the virtual currency; they countered it with regulations that made trading in such currencies an illegal transaction.

The Central Bank of Nigeria affirmed that the “central bank cannot control or regulate bitcoin. The central bank cannot control or regulate blockchain. Just the same way no one is going to control or regulate the internet. We don’t own it.” The financial powerhouse in Swaziland is trying to carefully tread the cryptocurrency path even though they are scared of relinquishing their control, hence warning their citizens to be cautious about their transactions.

The Bank of Namibia is yet to regulate virtual currency transactions and is also warning individuals who are engaging in the trade to be careful. The Bank of Uganda went as far as to say “whoever wishes to invest their hard earned savings in cryptocurrency forms such as OneCoin, Bitcoin, Ripple, Peercoin, Namecoin, Dogecoin, Litecoin, Bytecoin, Primecoin, Blackcoin or any other forms of digital currency is taking a risk in the financial space where there is neither investor protection nor regulatory purview.”

These financial powerhouses do have a lot in common. They all don’t trust cryptocurrencies and are not ready to regulate virtual currency trading. They all claim to be protecting their citizens, when all they do is attempt to criminalize their path to financial independence by making the trading of virtual currencies illegal in their respective countries.
They are well aware that the traditional financial services might be boycotted by individuals the moment they decide to regulate and legally adopt cryptocurrency into their various markets. And that’s something they want to avoid by all means necessary.

Consider China –  it had concerns about the virtual currency trading which prompted the September ban against every cryptocurrency transaction in the People’s Republic. This ban was as a result of “disrupted economic and financial order”, a supposed description of the cryptocurrency effect.

In any economy, the effect of cryptocurrencies will always be enormous, however, individual government and financial regulators do have a lot to do in overseeing the virtual currency market. Africa, on the other hand, is lagging in the areas of infrastructures and technology which partly explains the reluctance of African regulators in their acceptance of virtual currency.

Africa is regarded as an “emerging market”; this is true. And as an emerging market, there will be lots of tension and doubt as to the impact the virtual currency might cause, hence the difficulties in its adoption into the African economies. Africa has a long way to go in capacity-building for it to be able to absorb not just the cryptocurrency wave, but future innovations and technology too.

Cryptocurrency offers huge opportunities to its massive users. Apart from the intrinsic benefits attached to possessing virtual currency as highlighted above, it also is being used to provide financial solutions which the traditional financial systems are well known for. Despite the hostility towards the use of cryptocurrency in Africa, there has been an increased interest from within the borders of the continent. An estimated $3.2m is being recorded on Nigeria’s peer-to-peer marketplace. South Africa records an estimate of $2.5m. Morocco records $211,860 and Kenya $649,900. These figures are bound to increase as time goes on even with the ban laid by the individual government.


This heightened interest in cryptocurrencies was initially based on the continual value increase of the virtual currency, and as time went by, the authenticity, acceptability, and its untraceable attributes increased the value of the virtual currency. It now is becoming an integral part of some economies and financial markets even though some still find the idea of cryptocurrency outrageous.

It is true that traditional financial systems are isolated from the loop. It is also true that the usage of these currencies tend to permit and increases various acts deemed as criminal offences in various countries around the world. The latter is true even in the traditional banking system, so there are not enough excuses to justify the regulators’ claim.

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Whatsapp Launches New Venture Aimed at Businesses

 1 min read / 

whatsapp business

Whatsapp has launched a new app targeted at businesses, called the Whatsapp Business App, which they claim will enable companies to “communicate more efficiently” with present and potential customers.

This forms part of Whatsapp’s wider strategy to branch out into the corporate world. It plans to use the app to generate new revenue by charging businesses for using the extra communication tools that will enable them to better connect with their customers.

Although the app is set for worldwide release, at present it will only be available in Indonesia, Italy, Mexico, the UK and US. It includes a feature which indicates a business is authentic with a green tick badge next to their name.

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Amex: Troubled Credit Card Company Reports $1.2bn Net Loss

 2 min read / 

Amex annual report

On Thursday, American Express, or Amex, reported a net loss of $1,197m in the fourth quarter, the first net loss the company has experienced for 26 years.

Although the company stated that revenue from interest expenses was up 10% to $8.8bn, Amex said recent reforms to the US tax code meant the company incurred extra costs, including a repatriation cost on its foreign assets as well as a devaluation of its deferred tax assets. It estimates total costs amounted to $2.6m.

For the full year, net income was $2.7bn compared with $5.4bn the company earned in 2017. However, even with the estimated $2.6m the company claims it incurred from the recent tax charge, net earnings were still $5.3bn, $100m lower compared to last year.

In New York, American Express shares (AXP) took a near 1% tumble at the beginning of trade with shares finishing the day on $99.90.  JPMorgan Chase and Goldman Sachs anticipate greater earnings for 2018.

“Overall, we believe the Tax Act will be a positive development for both the U.S. economy and American Express” said CEO and chairman Kenneth Chenault. Chenault also said he will be leaving Amex in “very strong hands” when his successor, Steve Squeri takes over next month.

American Express has suffered from an ever-reducing share in the credit card market and ended its 14-year relationship with American warehouse chain Costco who in 2016 made an agreement with the market leader, Visa.

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Tencent Extends Facebook Lead

Tencent Facebook

Tencent has shot past Facebook to become the world’s most valuable social network.

Editor’s Remarks: Although Tencent briefly overtook Facebook in terms of market cap in November, the recent selloff of Facebook shares prompted the Chinese tech titan to regain the lead. Facebook investors responded negatively to news that Mark Zuckerberg’s plans to highlight family and friend-based content on the newsfeed would reduce the amount of time people spent on the site. Shares in Facebook have fallen 5% since that announcement, enabling Tencent to gain a $19bn lead over the US company. Tencent’s growth has been spurred on by its diversification away from its flagship messaging app, WeChat, and into video games.

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