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We are going to explore 30 frequently asked questions about Cryptocurrency in Africa that will help combat any misinformation and clear up any confusion surrounding the questions you may have!
Let’s explore:
The 17 most commonly asked questions about the African crypto market!
Is Cryptocurrency legal in Africa?
Partially.
African countries create a unique environment and that make up our amazing continent, just as each country has it’s own cultural influences, they also have their own rulings on cryptocurrency.
To help answer the question for any specific country you may have in question, I have composed a table of the 54 countries that make up the continent of Africa.
Legal status of Cryptocurrency in all 54 African Countries
| Legal | Illegal | Undecided | In Progress |
|---|---|---|---|
| South Africa | Algeria | Angola | Benin |
| Ghana | Egypt | Burkina Faso | Botswana |
| Kenya | Morocco | Sudan | Burundi |
| Nigeria | Namibia | Central African Republic | Cape Verde |
| Tunisia | Zimbabwe | Chad | Comoros |
| Uganda | Tanzania | Togo | Djibouti |
| Mauritius | Cameroon | Tunisia | Eritrea |
| Senegal | Ethiopia | Cote d’Ivoire | Equatorial Guinea |
| Seychelles | Lesotho | Eswatini (Swaziland) | Guinea |
| Zambia | Congo | Gabon | Guinea-Bissau |
| Gambia | Libya | ||
| Liberia | Malawi | ||
| Mali | Mauritania | ||
| Mauritius | Mozambique | ||
| Niger | Rwanda | ||
| Nigeria | Sao Tome and Principe | ||
| Seychelles | Sierra Leone | ||
| Somalia | South Sudan | ||
| Western Sahara | |||
| Zambia | |||
| Madagascar |
The IMF has a great article on Sub-Saharan Africa that goes into more detail regarding regulation and legality.
It’s important to note that the information in this table is only up to date as of May 2023, and the legal status of cryptocurrencies in many African countries is a rapidly changing landscape.
Additionally, some countries may fall under a grey area between legal an illegal. To help differentiate between this we have added the categories Undecided and In progress.
Undecided means:
There is no official policy, crypto currency is not recognized as legal tender, usually unregulated, but not illegal.
In Progress Means:
Some steps have been taken to start regulation, however it still has not been recognized as legal tender.
As I mentioned before, this information is subject to change very quickly and it is always a good idea to do your own research and stay informed about the latest regulatory developments in your country before investing in any digital assets!
Does Africa have it’s own Cryptocurrency?
No, at least not yet.
There is no single cryptocurrency that represents the entire African continent or is widely recognized as “Africa’s cryptocurrency.” And while there are a few blockchain projects and cryptocurrencies that have been developed by African companies or individuals and are aimed at serving the African market.
They are close to being an African Cryptocurrency as Tesla is to being a South-African company because Elon Musk was born there.
This is very likely to change as governments start moving towards CBDC‘s and start to adopt more blockchain related technologies to govern their processes.
How wonderful wouldn’t it be to have free trade and a stable African currency that represents the continent as a while!
What is the best place to buy crypto in Africa?
Personally, I have had a great experience using Bybit for my purchasing and trading, and Binance for withdrawals.
Bybit supports 53/54 countries on the African continent!
With the exception being Sudan.
Binance supports 40/54 countries, with the exceptions being :
Algeria, Cabo Verde, Chad, Comoros, Djibouti, Eritrea, Gambia, Guinea, Libya, Madagascar, Mauritania, Somalia, South Sudan & Sudan.
Another worthy mention is VALR, a South-African exchange with good service and rates and available in 45/50 African countries, excluding:
Burundi, DRC, Libya, Mali, Somalia, South Sudan, Sudan, Uganda & Zimbabwe
What are the fees associated with trading in Africa?
The fees associated with trading in Africa vary depending on the specific exchange or platform being used.
Some exchanges charge a flat fee per trade, while others charge a percentage of the trade value.
Additionally, there may be fees for depositing and withdrawing funds, as well as fees for converting between different cryptocurrencies or fiat currencies.
Because there are so many moving parts, it can become tricky to understand. To help break this down We have create a chronological fee break down for a $100 US dollar derivative trade on our favorite platform:
Chronological breakdown of fees on a derivative trade
| Fees | Amount |
|---|---|
| Deposit fee | Free |
| Trading fee | 0.075% |
| Overnight fee (x15 leverage) | -0.0426% |
| Funding fee (long) | 0.034% |
| Funding fee (short) | -0.034% |
| Withdrawal fee | 0.0005 BTC |
| Network fee (BTC withdrawal) | 0.0005 BTC |
| Network fee (ETH withdrawal) | 0.01 ETH |
| Total fees per trade (long) | 0.1096% |
| Total fees per trade (short) | 0.0186% |
| Total fees for 10 trades (long) | 1.096% |
| Total fees for 10 trades (short) | 0.186% |
| Estimated taxes (South Africa) | 20-45% |
| Estimated profit after taxes (long) | 11.9-36.4% |
| Estimated profit after taxes (short) | 11.5-36% |
Please note that the fees and taxes mentioned above are subject to change based on various factors such as market volatility, exchange policies, and tax regulations.
Additionally, this is only an example for a derivative trade, and there are fees not included here that are applicable when engaging with other financial protocols like NFT’s, De-Fi, Staking and Mining as well as other hidden fees.
It is important to stay updated on the latest fees and taxes before making any trades and you will have to research the regulatory requirements in your specific country.
What is the most popular cryptocurrency in Africa?
Bitcoin
However this is only taking into consideration market capitalization and is not truly an accurate representation of the most popular currency.
If we consider companies the time technology and effort that some cryptocurrency firms have invested into the continent and start talking about practical use and adoption, we definitely need to consider the blockchain Cardano.
The Cardano team has launched several blockchain-based projects in African countries, such as Ethopia, Nigeria and South Africa. They are also working on practical applications of blockchain such as digital identity and other useful projects, which sets it apart from most other blockchains.
Africa is looking towards the future, and looking for solutions, and we will very likely see rapid growth in companies and technologies that invest into our economies and infrastructures with integrity and fairness.
What was the first African blockchain?
The first official African blockchain was developed in South Africa and is called the “Khokha” blockchain.
It was created by the South African Reserve Bank in collaboration with a group of local banks in order to explore the potential use of blockchain technology in the country’s financial system.
The Khokha blockchain was designed to facilitate real-time gross settlement (RTGS) transactions between participating banks, with the aim of reducing settlement times and costs.
The successful completion of a pilot project in 2018 demonstrated the potential of the Khokha blockchain to transform the South African financial system, though little change has occurred yet as the blockchain has almost no public adoption yet.
What is the best crypto project in Africa?
We mentioned them earlier, when looking at the best places to buy crypto, however, the are doing well enough to deserve another mention here!
VALR – The South – African exchange
VALR is determined to compete with international exchanges and offer competitive prices to their customers.
Registered in South Africa in 2018, they are committed to expanding the market locally and throughout Africa and by offering a wide range of trading pairs and a user-friendly platform, VALR is poised to be the go-to crypto exchange for the rapidly expanding African Crypto Markets.
The competitive pricing, abundant coin pairings and good service is a breath of fresh air when compared to it’s competitors in the market
If you were looking for the best crypto technologies to invest into in an emerging market like Africa, then I recommend checking out our article on the most lucrative cryptocurrencies of 2023.
How many crypto holders are there in Africa?
Estimated at around 75 Million users, around 5.5%-6%
With Nigeria, South-Africa & Kenya making up around 50% of the userbase by themselves.
If anything this is indicative of how large the potential untapped userbase is, provided that the challenges facing the continent can be worked around of course!
Is Crypto big in Africa?
Not really..
Yet…
Statistically speaking we only have an adoption of between 5%-6% of the estimated 1.37 billion people that make up the African continent.
The constraints here are that large parts of Africa are underdeveloped, lacking in infrastructure, industry and technology. While they make up for this with an abundance of natural resources, it is incredibly hard to develop any for of fair trade agreements between ever changing governments and fiscal policy.
Yet hope is not lost, the severe disparity in adoption and general lack of regulation makes Africa the content with the most potential for growth within this industry, it also open doors of adoption that would not even be considered by more successful countries.
The future for Cryptocurrency across Africa is bright, especially as we start to see more practical applications for blockchain technologies emerging.
Which African Countries use the most Crypto?
| Country | Population | Estimated Crypto Users | % of Population Using Crypto |
|---|---|---|---|
| South Africa | 60 million | 9.5 million | 15.83% |
| Nigeria | 213 million | 33 million | 15.5% |
| Kenya | 54 million | 5 million | 9.26% |
| Ghana | 31 million | 1.2 million | 3.87% |
| Egypt | 102 million | 2.5 million | 2.45% |
| Ethiopia | 117 million | 1.2 million | 1.03% |
| Tanzania | 61 million | 500,000 | 0.82% |
| Uganda | 45 million | 200,000 | 0.44% |
| Morocco | 38 million | 200,000 | 0.53% |
| Zimbabwe | 15 million | 50,000 | 0.33% |
What type of verification do African crypto traders need?
The type of verification needed for African crypto traders may vary depending on the platform or exchange they are using.
Most reputable platforms and exchanges require some form of identity verification to comply with regulations and prevent fraudulent activity.
This usually involves providing personal information, such as name, address, and government-issued identification.
Some platforms may also require additional documentation, such as a passport or utility bill, to confirm the trader’s identity and residency.
As a good example, Bybit requires African users to complete KYC (Know Your Customer) verification before they can start trading.
Just as we discussed above, this involves providing personal identification documents such as a passport or national ID, as well as proof of address documents such as a utility bill or bank statement.
These verification process helps to ensure the security and legitimacy of trading activities on the platform.
Is Cryptocurrency a safe investment in Africa?
Cryptocurrency, like any other investment, carries inherent risks. It is important for individuals to conduct thorough research and analysis before making any investment decisions.
In Africa, there are additional risks associated with cryptocurrency investment such as a lack of regulatory oversight, limited access to reliable information, and potential for fraud and scams. However, there are also opportunities for growth and significant returns on investment in the crypto market.
To minimize risks, it is important to choose reputable exchanges, use secure wallets, diversify investments, and keep abreast of regulatory developments and market trends. It is also recommended to consult with a financial advisor or professional before making any investment decisions.
Be sure to check out our beginners guide on crypto and our article on how not to lose all your money trading it to ensure you are familiar with all the best practices relating to account security and trading safely!
Who regulates Cryptocurrency in Africa?
The regulation of cryptocurrencies in Africa varies by country, and in many cases, the regulatory framework is still developing.
Some countries have taken steps to regulate cryptocurrencies, while others have banned them outright.
For example, in South Africa, the Financial Sector Conduct Authority (FSCA) has issued a policy paper on the regulation of crypto assets, which sets out guidelines for how crypto assets should be regulated in the country.
In Nigeria, their Securities and Exchange Commission (SEC) has classified cryptocurrencies as securities, and has issued guidelines for their regulation.
In Kenya, the Central Bank of Kenya has issued warnings against the use of cryptocurrencies, but has not yet issued any specific regulations.
In general, the regulatory landscape for cryptocurrencies in Africa is still evolving, and investors should be aware of the risks involved in investing in a relatively unregulated market.
Always do your own research on the regulations pertaining to your own country!
If you are interested in this topic, we have an article covering the legal an regulatory framework of cryptocurrency in South-Africa that goes into a lot more detail on regulation it ZA.
What are the tax implications of trading crypto in Africa?
The tax implications of trading crypto in Africa vary from country to country as there is no standard regulation across the continent.
Some countries have not yet issued any official guidance on the tax treatment of crypto, while others have established specific tax laws and regulations for crypto transactions.
In general, trading crypto in Africa will be subject to either income or capital gains tax, but the tax rate vary depending on the country and how their Taxman assigns the role of trader or investor to their residents.
Additionally, crypto trading may also be subject to value-added tax (VAT) or goods and services tax (GST), depending on the country. Some African countries may also require traders to register for a tax identification number (TIN) and report their crypto trading activities to the tax authorities.
We have a comprehensive article on Crypto Taxes in South-Africa that explains these concepts in detail
Regardless of where you are, once you have profits in hand it is advisable to consult with a tax professional or financial advisor to understand the specific tax implications of your crypto trading activities in your respective country.
Is it safe to trade crypto on mobile devices in Africa?
Your crypto is as safe as the best practices you follow, even on a mobile device.
Any decent exchange, like Bybit, will have Biometric and 2-Factor Authentication available. Protect your passwords and keys, don’t fall for fishing scams or hang out on too many public networks and you will be fine!
Is it possible to make a living as a full-time crypto trader in Africa?
Absolutely!
In fact, with the lower cost of living in Africa and our weaker currencies, our profits go even further than in more developed nations.
Just always remember that crypto currency is inherently highly volatile which makes it substantially riskier than traditional investments.
Be sure to check out our beginners guide to make sure you take all the steps to manage your risk and exposure correctly!
In conclusion what should I know about trading cryptocurrency in Africa?
In conclusion, trading cryptocurrency in Africa has its advantages and disadvantages. On one hand, there is a growing adoption of crypto, a supportive community, and the potential to make profits due to the high volatility of cryptocurrencies.
On the other hand, there are regulatory uncertainties, security concerns, and a lack of reliable exchanges in some countries. Traders must be aware of the tax implications, use secure platforms, and educate themselves on market trends and strategies.
Additionally, traders should consider the cost of living in their respective countries, as it may be easier to make a living trading crypto in African countries with lower costs of living. Overall, with proper research and caution, trading cryptocurrency in Africa can be a lucrative opportunity for those willing to take the risk.
Now be sure to head over to our trading resources to make sure you have the knowledge and capability to earn the profit you want!
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