Law of Cryptocurrencies 101: Development of Cryptocurrencies and their Relationship With Law

Foreword

Cryptocurrencies are defined as technologies that aim to distribute the power of governance and regulation—currently within the purview of central authorities—to the members of society. Cryptocurrencies have a huge market value, and the volume of transactions increases every day. In today’s world, cryptocurrencies, crypto monies, and other crypto assets are used as a source of investment. Because of the regulations of governments; cryptocurrencies, and other decentralized economic assets cannot be used as tools that enable people to maintain their daily activities. It cannot be counted as the main aim behind the development of cryptocurrencies. In addition, because of these restricting regulations, neither countries nor citizens benefit from this huge economic value at its maximum level, and it causes the usage of crypto assets as a source for black economies. By regulating the usage of cryptocurrencies, countries may benefit from their economic value; the association of cryptos and the black markets may be undercut, while during economically difficult times, people may even use them for transactions, earning money. Additionally, decentralized technologies can develop faster without harming the sovereignty of the states. In brief, the regulation of cryptocurrencies is beneficial for both countries and individuals in these aspects. This series is going to enlighten its readers about which legal remedies exist and how to tackle this emerging space from the perspective of symbiotic regulation aimed at enhancing our daily lives through these emerging technologies.

This 101 series is divided into seven chapters, with each providing a distinct discursive element on the legal environments of cryptocurrencies.

1. Law of Cryptocurrencies 101: An Introduction, Development of Cryptocurrencies and their Effects on Law 

2. Law of Cryptocurrencies 101: Legal Turbulence and Asset Dilemmas of Cryptocurrencies and other Crypto Assets 

3. Law of Cryptocurrencies 101: Regulations about Cryptocurrencies in America: In North and South American Countries 

4. Law of Cryptocurrencies 101: Regulations about Cryptocurrencies in Asia: China, Russia and Others  

5. Law of Cryptocurrencies 101: Regulations about Cryptocurrencies in Europe: United Kingdom, France, Germany and Others

6. Law of Cryptocurrencies 101: Regulations about Cryptocurrencies in African Countries

7. Law of Cryptocurrencies 101: Dispute Resolutions by Using Decentralized Systems: Resolutions for Cryptocurrencies

Law of Cryptocurrencies 101: Regulations about Cryptocurrencies in African Countries

Africa continues to be a steadfast and sustainably developing region, despite many individual countries on the continent continuing to face modern economic and social challenges. The continent has mainly suffered from economic losses and, otherwise, limited gains derived from productive contexts. Some African economies even seem to continue to be dependent on former colonial powers such as the United Kingdom or France. More critically, prevailing low remittance flows and high inflation rates result in acute economic stresses on the continent (Akun et al., 2022).

At the same time, the emergence of decentralized technologies worldwide is also proving transformational in Africa. Indeed, the continent is one of the fastest-growing cryptocurrency markets in the world, and a large segment of the continent's citizens are already active users of decentralized payment systems (Fuje, Quayyum & Molosiwa, 2022). Because of prevailing economic instability and the popularity of non-traditional monetary units, the United Nations (UN) and other international establishments see the emerging cryptosphere as a viable source of economic development for African countries (Akun et al., 2022). Yet, it cannot be said that continental and national legal developments mirror the economic and technological advances of these cryptocurrencies. Alarmingly, as of 2024, 20% of Sub-Saharan countries have entirely banned cryptocurrencies (Fuje, Quayyum & Molosiwa, 2022). In addition, many states lack comprehensive legislative action to regulate or promote the use of cryptocurrencies. There are some considerations that contribute to this patchwork of legal 'unknowns.'

Figure 1: An All-African Crypto Conference (African Money & Defi Summit, 2023).

Contemporarily, hesitation toward the use of decentralized monetary units in African economies includes perceived threats such as the potential for lower tax incomes and subsequent shortcomings in national budgetary plans (Ahannaya, 2021). Policymakers on the continent are equally worried about capital outflows (Fuje, Quayyum & Molosiwa, 2022). Currently, in most African countries, regulations at the national level do not seem to be enough. This hesitancy has also resulted in a perceived unpreparedness levied toward individual and national regulators, causing some actors, such as the Central African Banking Commission (COBAC), a supervisory financial institution of the region, to swiftly ban cryptocurrencies from its six member states (Etuge, 2022).

Security concerns are also prevalent, with doubts remaining over the usage of cryptocurrencies for activities that undermine the state's monopoly over force, such as through terrorist financing. Such groups may use these channels to fund their operations, largely outside the purview of the state. With the usage of cryptocurrencies, it currently remains almost impossible to detect the actors behind the transactions. Reports have even linked increased terrorist activities, such as that of Boko Haram, which operates around Lake Chad, to cryptocurrencies (Maza, Koldaş & Aksit, 2020).

The continent's immense potential to benefit from cryptos is evident despite reigning doubts. How individuals acclimate to the crypto boom will likely define the future of stability, both economically and with regards to security. Nonetheless, inclined towards or against, states have begun to take the emerging threats and opportunities seriously. The legal environment of some of the most important regional actors will be discussed in the following.

Figure 2: A General View of Cryptocurrency Regulations in Africa (Pérez, 2020).

Algeria

Although Algeria is a developing country economically, it was actually a continental pioneer with regard to the digitalization of monetary streams and the economy. Even widespread studies have readily been made available that tout valid benefits assigned to the implementation of digital technologies (Halzoun, 2023). Nonetheless, decentralized monetary units are not among these technologies that Algeria considers beneficial. In fact, cryptocurrencies have not been legal in the country since 2018, when they were prohibited by Algerian authorities under that year's Finance Law. To buy, sell, or possess cryptocurrency is illegal, and that includes any form of business activity or operation involving cryptocurrencies (2024). Not least, blockchain technology has also yet to be considered an important technology in the business sector of the country. Conversely, according to Algerian experts, expectations of better digital transformation strategies and an economic boom will likely rely on the early adoption of this technology, and the ability to find new cryptocurrency exchange platforms will be crucial in that quest (Halzoun, 2023).

Angola

In Angola, the main strategy remains to safeguard its monetary sovereignty and financial independence. For that reason, the country has implemented measures to control virtual currencies that are operational in their territories (Lusa & Verangola, 2023). Yet authorities had not been entirely clear on how to make use of the rising tendency to use decentralized monetary units, including recognizing them legally, without running the aforesaid risks of potentially promoting money laundering and the financing of terrorism. Additionally, these currencies include the risk of undermining the authority of the National Bank of Angola (NBA) [Lusa & Verangola, 2023]. Notwithstanding, in August 2023, Angolan authorities successfully introduced a new bill that seeks to regulate virtual assets and cryptocurrencies. Compromises to allow the safeguarding of national interests were made. Hence, mining activities were banned from Angolan territories, and the circulation of cryptocurrencies and other digital assets was strategically limited (Adeyemo, 2023). In turn, financial institutions are now prohibited from engaging in activities related to cryptocurrencies, which some link to motivations for safeguarding the availability of electricity in the country (Kodzilla, 2023). The effects were stark in contrast: until 2021, Angola had been only the third country on the African continent to have a stable and living crypto environment, which included the highest number of cryptocurrency mining operations; however, since 2023, neither mining activities nor investing in cryptocurrencies are possible in the country (Kodzilla, 2023).

Figure 3: The Central Bank of Angola (Greig, 2024).

Cameroon

Cameroon remains at a crossroads. On the one hand, it stands among the African countries that do not possess a strong economic or financial sector. Indeed, regulations regarding the financial sector are unorthodox in Cameroon; the sector's services are operated by financial groups in the country. This condition brings several challenges for Cameroon and creates a potential challenge for the country to regulate cryptocurrencies (Etuge, 2022). As a matter of fact, the government of Cameroon has not legislated cryptocurrencies yet, as there are no specific regulations about decentralized technologies (Stolp, Perumall & Selfe, 2018). Existing financial regulations do not regulate cryptocurrencies in their current forms (Etuge, 2022).

On the other hand, according to local experts, there is immense upside potential for cryptocurrencies, which may be beneficial for the economic development of Cameroon in the long run. Indeed, it is argued that the degree of privacy and confidentiality afforded by the decentralized market would allow foreign investors easier and more frequent access to the national market. Moreover, the creation of new business opportunities for international cryptocurrency exchange platforms and cryptocurrency miners, as well as new job opportunities for Cameroonian citizens, exists as a prospective entity for the law makers of the country (Etuge, 2022). In fact, already back in 2015, the Cameroonian government declared that they had created a new bitcoin-like digital currency called Trest. And while it has so far been a successful legal tender for the national electricity market, it promises that its unfulfilled potential may soon be transformative (Stolp, Perumall & Selfe, 2018).

Egypt

Egypt is a country where cryptocurrencies continue to be extremely popular with the civilian population, despite a long-time ban on the use and proliferation of those decentralized monies. In 2023, the trade volume of cryptocurrencies in Egypt even increased dramatically, with the number of Egyptian users on international cryptocurrency exchange platforms such as Binance and CEX.IO being especially noticeable (Handagama, 2023). Today, it is estimated that there are 3.32 million cryptocurrency owners in Egypt, or almost 3% of the country’s total population (Greenfield, 2023). Despite the national ban, current banking laws have not been formulated comprehensively. Combined with the jump in cryptocurrency usage, it has even caused uncertainty about whether its usage was banned in Egypt or not (Handagama, 2023).

Figure 4: A Brief History of Bitcoin in Egypt (Enterprise, 2017).

Nonetheless, what is clear is that in 2018, religious leaders in Egypt staunchly declared that making transactions with cryptocurrencies was prohibited under Islamic law through the proclamation of a fatwā. Furthermore, the Central Bank of Egypt (ECB) banned these decentralized monetary units totally due to the ascribed high risk and potential tendency to support black market and terrorist activities (Greenfield, 2023). However, none of these restrictions have stopped Egyptians from making transactions with cryptocurrencies, as is apparent from the above reports (Handagama, 2023). As a result of the developments and public discourse at that time, in 2020, the Egyptian Parliament forced the ECB to generate new legislation about cryptocurrencies. Since then, the law has defined cryptocurrencies as monetary units that are not issued by central authorities and which are circulated via the Internet. According to this law, in order to make transactions with cryptocurrencies or to found a new cryptocurrency exchange platform, a license has to be obtained from the ECB, hence the formal ban on regular activities that usually proliferate amongst Egyptians (Handagama, 2023). It is expected that the national regulatory framework for cryptocurrencies will have to evolve more, and new and advanced legal mechanisms may be implemented (Greenfield, 2023).

Ethiopia

Ethiopia is a country where blockchain technology is used in various fields. For instance, in the coffee market, the Ethiopian Ministry of Finance and Technology created a blockchain system to track the shipments of coffee (Stolp, Perumall & Selfe, 2018). However, for cryptocurrencies, it cannot be said that Ethiopia is a particularly crypto-friendly country. They do not demonstrate the same tendency to sanction the widespread use of decentralized cryptocurrencies as was generally afforded to the blockchain technology itself. In 2022, the Ethiopian Central Bank declared that cryptocurrency transactions were illegal, but less than three months later, this decision was reversed, likely not to stifle its potential, which was generally recognized (Ngila, 2022). Currently, there is uncertainty about whether cryptocurrencies are legal or illegal in the country. Nonetheless, new requirements for cryptocurrency exchange platforms to register with the database of the Information Network Security Administration (INSA) within 10 days of formation were introduced (Ngila, 2022). Some of these developments may be considered confounding. Regardless, the country is innovating both legally and technologically.

Figure 5: The Logo of the Securities and Exchange Commission of Ghana (SEC, 2023).

Ghana

In Ghana, there are two authorities that can issue an instrument as a legal tender of official currency: the Central Bank of Ghana (CBG) and the Securities and Exchange Commission (SECG). Trading and using cryptocurrencies in Ghana are not legal yet, mainly because the country does not accept cryptocurrencies as legal tender. Indeed, if a currency is accepted as an official currency, it has to be supported by the CBG, which so far has been rather meager, especially considering repeated warnings emanating from both of these authorities about the risks of cryptocurrency transactions (Stolp, Perumall & Selfe, 2018; GT Bank, 2023). At the very least, developments are moving toward recognition of the technologies' potential as a future exchange and investment medium, as, in 2022, the country declared that they were going to develop a comprehensive framework for the regulations of digital currencies and other virtual assets (Henriques, 2022). This was supported by the CBG, which has drafted the 'Payment Systems and Services Bill', which seeks to enable new regulations on cryptocurrencies and defines cryptocurrencies as digital assets, not currencies (Stolp, Perumall & Selfe, 2018; Henriques, 2022).

Kenya

The Kenyan fintech ecosystem is one of the most vibrant and positively developed on the continent, which also includes the cryptocurrency market (Akun et al., 2022; Geral, Muthoni & Kalule, 2021). The Kenyan Law holds several pieces of legislation that directly cover the banking sector and financial system of the country and even include cryptocurrencies more indirectly under the Central Bank Act, the Central Depositories Act, and the Income Tax Act, amongst others (Odeyo, 2021). From the Capital Market Act of Kenya, it can be understood that cryptocurrencies are nationally defined as securities (Geral, Muthoni & Kalule, 2021). Thus, the corresponding Central Depositories Act facilitates the operations of the Central Depositories and Settlement Corporation (CDSC), the establishment that deals with shares, bonds, and securities. And for the CDSC, cryptocurrencies share the characteristics of conventional securities, making cryptocurrencies 'alive' in Kenyan territories (Odeyo, 2021).

Figure 6: Blockchain and Cryptocurrency Ecosystem of Kenya (Muraya, 2023).

Yet, according to the Central Bank Act of Kenya, the official currency of Kenya is the Kenyan shilling, and neither any cryptocurrency nor blockchain technology is able to create legal tender in the country. In addition, the Central Bank is defined as the sole authority of the country that may issue notes or coins in Kenyan territories, therefore not recognizing the ability of cryptos to function as a separate currency (Odeyo, 2021). Moreover, the bank issued a public warning about the use of cryptocurrencies. In spite of this, there is no law that prohibits the usage of cryptocurrencies in the country (Geral, Muthoni & Kalule, 2021). The Capital Market Authority is another authority that regulates the fintech industry. In 2022, by amending the Capital Market Law of Kenya, it created a new taxation mechanism that also applies to crypto assets (Andersen, 2022). Whereas before, income tax was applied, now capital market taxes apply to cryptocurrency transactions across the country. This amendment actually further consolidates cryptocurrencies' status as a security in the country, which invites further positive developments (Andersen, 2022).

Libya

Libya is one of the least crypto-friendly countries in Africa. In Libya, the Central Bank of the Country announced that cryptocurrencies are illegal because there is no protection mechanism for the use or exchange of cryptocurrencies. The country also supported this decision on the basis of terrorist financing worries and an anti-money laundering crackdown (Geral, Muthoni & Kalule, 2021). Indeed, the Libyan authorities are also enforcing its ban through a series of repeated investigations and operations against companies dealing with cryptocurrencies and those engaging in its mining. As reported in other African countries, another prevalent concern remains the 'excessive' consumption of energy associated with the procurement of cryptos (El-Assasy, 2023). Despite all these restrictions, as of 2022, the police stated that almost 1.3 percent of the population continues to engage in—and thus circumvent the ban on—cryptocurrencies (El-Assasy, 2023).

Madagascar

In Madagascar, blockchain technology is used for environmental protection, economic advancement, and social issues. Especially in environmental areas of the island and in its zoos, the technology is used to record vital measurements, such as tree planting frequencies and animal movements (Geral, Muthoni & Kalule, 2021). Yet comprehensive regulations in the country about the usage of digital currencies derived from blockchains are absent. However, at the same time, the country's citizens have faced limitations to their crypto activities as safety and regulation concerns prevail, making Madagascar currently unsustainably poised toward the beneficial extraction and use of cryptocurrencies (Freeman Law, n.d.).

Figure 7: The Central Bank of Madagascar (Mitchell, 2015).

Morocco

The Central Bank of Morocco (the Bank of Al-Maghrib) described cryptocurrencies as a hidden payment system that is not backed by an organization, and they added that transactions based on cryptocurrencies remain highly risky (Geral, Muthoni & Kalule, 2021). In 2017, the foreign exchange authority of Morocco banned cryptocurrency transactions in the country through a report interpreting the current financial legislation of Morocco and its guiding framework (Geral, Muthoni & Kalule, 2021). Although the ban does not restrict the use of cryptos, citizens do not have the right to open accounts on foreign cryptocurrency exchange platforms, thus limiting the circulation and vitality of decentralized currencies in the country (Bziker, 2021).

Mozambique

The Bank of Mozambique (BoM), as the main financial authority of the country, has issued several warnings about the usage of cryptocurrencies, claiming impasses in its proper regulation in the absence of an emitting central authority (Freeman Law, n.d.). The BoM accepts that there are huge benefits to be derived from cryptocurrencies, such as the potential for easier transactions and the fact that they may otherwise be gateway tools to increased investment in the country. However, they also voiced similar concerns, such as those earlier addressed in this article; criminal activities and terrorist financing are also at the top of this list of lawmakers apprehension toward the anonymous structure of crypto movements (Maputo, 2018). There are no cryptocurrency exchange platforms in Mozambique (Freeman Law, n.d.).

Namibia

Namibia is considered a decentralization-friendly country, mainly because it attempts to become a vibrant investment hub on the continent. Namibia has supported this strategy by enacting new legislative amendments that integrate consumer protection mechanisms for users and owners of cryptos and decrease the risk of money laundering and terrorist financing in the country (Modise, 2023; DLA Piper, 2023).

What is more, while the Central Bank of Namibia does not accept cryptocurrencies as legal tender, they do accept decentralized monetary units to be used within the private sector to facilitate transactions, meaning they may be exchanged for goods and services (DLA Piper, 2023). Officially, the central authorities continue to encourage the sensible and careful use of cryptocurrencies (Shumba, 2023).

Figure 8: The First Bitcoin ATM in Namibia (Erongo, n.d.).

Legally, the Namibian Financial Institutions and Markets Act (FIMA Act) outlines the definition of traditional securities. According to this act, the main authority that can declare an instrument a security is the Namibia Financial Institutions Supervisory Authority (NAMFISA), which currently rejects the notion of cryptocurrencies being defined as securities (DLA Piper, 2023). More specifically, the Virtual Asset Act of 2023 began regulating the activities of virtual asset service providers, and licensing requirements were brought forth, covering both cryptocurrencies and those service providers. This act also encouraged closer cooperation between and protection for banks, as there had been no safeguards for their client businesses that dealt with cryptocurrencies. A breach of this licensing requirement is subject to hard punishment, such as being banned from the country. The country continues to disregard the taxation of cryptocurrencies and the profits derived therefrom (Shumba, 2023).

Nigeria

Nigeria is one of the most crypto-favorable nations and was a pioneering cryptocurrency and blockchain adopter (Singh, 2023). A significant number of citizens own cryptocurrency reserves, as more than 12 million citizens are cryptocurrency owners, accounting for roughly more than 5% of the total population (Greenfield, 2023). According to Nigerian experts, cryptocurrencies should be considered productively beneficial for the Nigerian economy, with arguments supported by national studies and diligent research claiming that the advantages of decentralized monetary units for the Nigerian economy exceed their potential disadvantages (Ahannaya, 2021). In spite of this positive outlook, attempts by authorities to ban cryptocurrencies have been repeatedly proposed. Demonstratively, they have so far not yielded results, as there is no legislation that outlaws the usage of cryptocurrencies in Nigeria (Ahannaya, 2021; Ukwueze, 2021).

Figure 9: Usage of Cryptocurrencies in Nigeria in a Comparison with Global Economies (Bziker, 2021).

There are two main financial authorities in Nigeria that can legalize a payment method and define an instrument as currency: the Central Bank of Nigeria and the Securities and Exchange Commission (SEC). The Central Bank of Nigeria remains opposed to fully legalizing cryptocurrencies, but the approach of the national SEC has been more welcoming going into the 2020s (Ukwueze, 2021). Indeed, with new regulations and directives, the Securities and Exchange Commission attempts to create safe ways for consumers in their dealings with cryptocurrencies (Adisa, 2022). Notably, the SEC published a document called 'New Rules on Issuance, Offering Platforms, and Custody of Digital Assets' on its website that envisions guiding principles for banks and other financial institutions on how they may interact with digital assets (Singh, 2023). For cryptocurrency transactions, asking for permission from the Securities and Exchange Commission as well as complying with their requirements is an obligation (Greenfield, 2023).

Contrarily, cryptocurrencies are not recognized as legal tender by the Central Bank of Nigeria, and the same authority has banned commercial banks from engaging in cryptocurrency transactions (Greenfield, 2023). They also advised Nigerian banks and individuals to stay away from cryptocurrencies because of their potential for use in criminal and fraudulent activities, levying tough legal punishments on offending institutions and individuals associated with them (Adisa, 2022; Singh, 2023).

Federal Inland Revenue Services announced that cryptocurrency transactions are to be taxed with a capital gain tax, while also prospectively demanding the application of taxes similarly to those applied to digital lotteries and gaming businesses (Singh, 2023).

Figure 10: Fintech Ecosystem in Nigeria (Santosdiaz, 2022).

In Nigeria, it is clear that despite lingering uncertainty about the legality of cryptocurrencies, there continues to be important intellectual and physical investment into the productive use of blockchain technology. The major beneficiaries of this investment are the financial sector and the agricultural activities of the country (Ahannaya, 2021). Even the announcement of a national blockchain strategy promises a bright future for the country as it attempts to create new avenues for blockchain-based economic activity with the aim of attracting new foreign direct investments. The development of the first national crypto monetary unit for the country, called the eNaira, is indicative of this shifting perspective (Greenfield, 2023).

The Central African Republic

The Central African Republic is one of the primary countries in Africa that has suffered from political and economic issues. The country was plunged into civil war in 2013, causing several human-instigated disasters (Central African Republic Adopts Bitcoin as Legal Currency, 2022). The war also caused an economic downturn in the country. The Central African Republic tried to solve these problems by using decentralized technologies. In 2022, the Central African Republic took action to accept Bitcoin as legal tender, and it became the only country in Africa to accept a decentralized monetary unit as a legal currency. Currency exchanges are not liable to taxation as well (Central African Republic Adopts Bitcoin as Legal Currency, 2022). However, there are concerns about this decision. For instance, in 2021, El Salvador accepted Bitcoin as a legal tender, like the Central African Republic. But the financial instability of Bitcoin caused disastrous problems in the Salvadorean economy (Central African Republic Adopts Bitcoin as Legal Tender, 2022). The Republic of Central Africa can face the same destiny. In addition, the Central African Republic is under the jurisdiction of COBAC, and this regulation violates the decision of COBAC about banning the usage of cryptocurrencies (Fuje, Quayyum, and Molosiwa, 2022).

South Africa

The South African Reserve Bank (SARB) can be defined as the main authority on payment systems. By the SARB Act 1989, the bank became the only authority to define an instrument as a currency. According to the SARB, only currencies issued by the banks can be defined as legal tender in South African territories. Officially, cash payments may be the only form of payment in the country. Because of the lack of a proper regulatory framework and legal protection, cryptocurrencies cannot be accepted as legal tender and secure payment methods in the country (Hamukuaya, 2021). Along with SARB, the South African Revenue Services (SARS), which are responsible for the taxation of all economic instruments, maintain that decentralized monetary units can neither be accepted as the official currency of South Africa nor as a medium of exchange. For SARS, cryptocurrencies cannot be taxed by capital gain tax as well. They are in the form of intangible assets, and they need to be taxed according to this structure (Geral, Muthoni & Kalule, 2021). The Financial Sector Conduct Authority, the Payments Association of South Africa, and the Banking Association can be defined as other authorities that check the method of payment (Hamukuaya, 2021).

Figure 11: South African Reserve Bank (Kutlu, 2022).

In South African territories, there is no separate regulatory act that is related to cryptocurrencies. Because of the lack of specific regulations about cryptocurrencies, it cannot be said that investors and users of decentralized monetary units are under protection (Chudinovskikh & Sevryugin, 2019). On the other hand, the South African government has taken new steps to ensure that cryptocurrencies are legally supported. In 2022, due to new financial regulations, the requirement to register with the system of financial regulators for financial services became more stringent, including cryptocurrency exchange platforms. Later, a new policy position paper about cryptocurrencies was published by the SARB. According to this study, it is expected that in the near future, the legal statute of cryptocurrencies will be defined by South Africa. In addition, it is also expected that new tax applications and counter-terrorist financing regulations will be applied to the decentralized monetary units as well (Akun et al., 2022).

Senegal

Cryptocurrency trading remains legal in Senegal, but there are no clear regulations or even guidance about the trade of these decentralized monetary units, potentially augmenting the traditional risks associated with the ownership and usage of cryptocurrencies. Productively, in 2016, Senegal launched its own national digital currency called eCFA, which can be stored in mobile e-money wallets (Geral, Muthoni & Kalule, 2021). Its usage has even expanded beyond Senegal in recent years to include Côte d'Ivoire, Benin, Burkina Faso, Mali, Niger, Togo, and Guinea-Bissau, demonstrating clear future promise in the region (Mizrahi, 2016).

Tanzania

According to the Bank of Tanzania Act, the Bank of Tanzania (BOT) is the sole authority that can declare an instrument as legal tender in the country (Bank of Tanzania, 2019). Indeed, the bank has decided that the only official currency in Tanzania is the Tanzanian shilling (TanzaniaInvest, 2023). The legality of Bitcoin in Tanzania remains unclear; similarly to many other African countries, it continues to be rejected as an official currency (TanzaniaInvest, 2023). Instead of the additional public warning from the BOT about trading and marketing virtual currencies, there is no legal obstacle for Tanzanian citizens to use and invest in cryptocurrencies (TanzaniaInvest, 2023). In addition, despite the concerns of the central bank of the country, Tanzania includes a huge amount of cryptocurrency mining activity (Geral, Muthoni & Kalule, 2021).

Figure 12: The High Court of Justice of Uganda (Linebaugh, 2018).

Uganda

Although the government of Uganda has issued a public warning about cryptocurrencies, the legal system does not currently inhibit or prohibit cryptocurrencies. They are not recognized by the central bank of the country as a medium of exchange. Indeed, the Bank of Uganda is the sole authority that can accept a currency as a legal tender (Geral, Muthoni & Kalule, 2021). In April 2022, the Bank of Uganda issued a new national payment system called the National Payment System Act, and with this act, a necessity to convert crypto assets into electronic money became a necessity in Uganda. This decision of the Bank of Uganda faced new cases, but the high court of Uganda decided that the act was not irrational. In other words, the High Court of Uganda also decided that the restrictions on cryptocurrencies are legal (Cryptocurrencies Illegal in Uganda – High Court Judge Rules, 2024).

Conclusion

From all this information, it can be understood that the regulations about cryptocurrencies are in the process of development in African countries. In many of them, their legal statute and legality are not certain, and there are no relevant regulations that are related to cryptocurrencies. It can clearly be said that Kenya, Namibia, and the Central African Republic are the primary countries where the legal statute of cryptocurrencies is certain. In these countries, there is a friendly approach to these decentralized monetary units. Indeed, according to the Global Crypto Adaptation Index, Kenya, Nigeria, South Africa, and Tanzania are among the top 20 global countries in cryptocurrency trading regulations (Akun et al., 2022). Another certainty is the prohibition of these monetary units. In fact, in Libya, Morocco, and Algeria, these currencies are forbidden, and that is another certainty. Nigeria and Egypt are in a good position regarding cryptocurrency legislation, but there are also uncertainties about these monetary units in these countries. Unfortunately for other African countries, there is immense uncertainty about how decentralized monetary units are regulated. In conclusion, Africa has a huge potential to benefit from decentralized technologies, but legally, there are several things that need to be done.

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