IMF calls for regulation of cryptocurrencies on the African continent
The International Monetary Fund (IMF) is calling for stronger regulation of cryptocurrencies on the African continent after the FTX scandal.
The IMF and cryptocurrencies: the agreement has not always been there. Moreover, the international monetary authority has repeatedly called for strict regulation of digital assets on a planetary scale since they would represent stability risks for the global financial system. This “hawkish” discourse was further reinforced with the FTX collapse scandal.
For the IMF, market segments as fragile as Africa, must at all costs “regulate” the crypto sector. According to his findings, ⅔ of the countries on the continent apply some sort of control over cryptocurrencies; however, the report does not clearly indicate whether this is only a quarter of countries in sub-Saharan Africa.
In this sense, he calls for a strengthening of regulations because the excessive use of crypto-currencies could harm the effectiveness of monetary policies. The IMF is also concerned that digital assets are a way to transfer funds illegally.
Politicians are also concerned that cryptocurrencies could be used to illegally transfer funds out of the region and to circumvent local rules aimed at preventing capital outflows. The widespread use of crypto could also undermine the effectiveness of monetary policy, creating risks for financial and macroeconomic stability.
Can we read in the note of the IMF on its blog
Cryptocurrencies are growing rapidly in Africa
This is one of the reasons why the IMF is advocating for stronger cryptocurrencies in Africa. More and more Africans are adopting this type of asset. A report by Kucoin showed that the number of crypto-asset users increased by 2500% in the year 2021. No region in the world has seen such a high adoption rate for this year.
In an interview with BeInCrypto, Binance’s Head of Francophone Africa, Carine Dikambi, confirmed this growing appetite for cryptocurrencies on the continent.
“Africans are willing to turn to DeFi to make financing more transparent and accessible. These technologies make it possible to facilitate the transfer of value and to better appropriate resources without having to resort to an intermediary.”
She also touched on Binance’s various ambitions for the continent. Whether it’s education, financial opportunities, security and user protection, the Changpeng Zhao exchange is likely seeking to conquer Africa.
All information on our website is published in good faith and for general information purposes only. Any action taken by the reader based on information found on our website is entirely at their own risk.