The fifth smallest continental African nation, Republic of Burundi, says no to cryptocurrencies due to lack of regulation in trading services.
In an official report from Burundi’s Central Bank, the Director, Alfred Nyobewumusi, warned its citizens against using cryptocurrencies as the number of scams associated with digital currencies increase. Nyobewumusi further said the government will take “strong measure” against cryptocurrency traders in the country.
The East African state becomes the first state in the region to completely ban virtual currencies explicitly naming Bitcoin, Ether, and Litecoin in its report. The statement from the government authority stated,
“SINCE VIRTUAL CURRENCIES OR CRYPTOCURRENCIES ARE NOT REGULATED AND ARE NOT ISSUED OR GUARANTEED BY ANY GOVERNMENT OR CENTRAL BANK, THESE CURRENCIES DO NOT HAVE LEGAL TENDER IN THE TERRITORY OF BURUNDI.”
Increase in fraud and scams in Burundi
Lack of user protection for the public has forced Burundi to ban all forms of digital cryptocurrency trading within its borders. The Bank of the Republic of Burundi recently stated that these measures were taken in order to protect the public.
Recently, some citizens from Burundi found themselves in the wrong end of a trade deal and lost a lot of money to fraudsters leading to the government latest regulatory action.
The central bank also issued caution to banks and financial institutions against offering any services or transactions channels in cryptocurrency industry. The public is warned against using and making transactions in crypto as they are not authorized by the Central Bank.
East Africa’s Rising Adoption in Crypto
Despite the latest ban by Burundi which follows a number of central banks across the continent offering warnings against the use of digital assets, nations across the East African region are looking ready to embrace cryptocurrency.
Kenya, Africa’s Silicon Valley, is known as the first country to widely adopt mobile money transactions with M-PESA and has shown great steps in regulating blockchain and associated cryptocurrencies. The country’s technological advancement – having one of the fastest/cheapest internet speeds in the world – is helping blockchain flourish despite the challenges in regulation.
Despite warnings from Kenya’s central bank about the volatility of crypto-currencies, some businesses in Nairobi are now accepting Bitcoin payments. The total number of Bitcoin transactions in Kenya is estimated to be worth over $1.5m, according to the Blockchain Association of Kenya.
Africa, in general, is the perfect breeding ground for the crypto ecosystem. There are numerous under-banked people who live under authoritative regimes. Also, any established financial institutions still haven’t penetrated deep into the fabric of African society. With the booming technological revolution in the continent, even the adoption of Bitcoin can piggyback.
The Blockchain Association of Kenya (BAK) is actively working to educate the country on the benefits of using crypto-currencies and blockchain. The non-profit body says that using virtual currencies can greatly reduce the cost of transactions, and enable people without bank accounts to quickly make and receive payments.
Bitcoin transfers through WhatsApp are also rapidly expanding in the country. David Gitonga, a cryptocurrency writer in Nairobi explains that despite the fact that the Central Bank of Kenya attacked virtual currencies, users continue to be involved in the market.
Despite constraints in Uganda, such as the statement from Louis Kasekende, Bank of Uganda’s deputy governor, warning people against dealing with unregulated cryptocurrencies, the country is the only country in Africa to have its Binance wing, Binance UG.