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Blockchain regulation takes a backseat in Africa

Blockchain regulation takes a backseat in Africa

While more blockchain-related initiatives are being proposed for use in Africa, the continent seems to be more focused on adoption than on regulatory measures related to the technology.

Amid ongoing projects and heightened activity surrounding technology adoption and implementation projects, experts believe there is an increase in knowledge of the technology and a sense of maturity.

Irlon Terblanche, the founder and chief executive at Blockchain Capital (South Africa) who argues that there wasn't a basis for blockchain regulation in the first place.

"The blockchain is just a distributed database system. It is only one component of a cryptocurrency. And there is no regulation stopping anyone from using a distributed database or distributed ledger as it is more commonly called," he says.

"For me, the most important assessment that trumps everything else is that the bulk of people, even so-called 'experts' do not truly understand Bitcoin, cryptocurrency and blockchain technology. And as a result, you have all kinds of disparate initiatives from different companies, using different platforms, trying to win market share in the lucrative remittance space."

Terblanche maintains that those who loosely understand the blockchain to be the cornerstone and building block of a cryptocurrency, will continue to see it as against the establishment since "the vast majority of cryptocurrencies were born from opportunistic capitalists trying to raise cash through ICOs/STOs (and more recently IEOs) or creating alternative ecosystems (dApps) that do not really need a cryptocurrency or blockchain to function."

Whereas those who "understand the blockchain to be an enterprise or private blockchain, they way the likes of IBM, Amazon or Oracle implement them" will not see it as having its origins in the anarchist, cypherpunk space.

Use cases

The Red Cross has joined efforts to use blockchain-backed currencies in parts of Africa as it launched a two-year aid delivery initiative on Tuesday that could expand in Kenya, where it has been tested, and rolled out in Cameroon, Malawi and Zimbabwe.

As the largest humanitarian donor after the United Nations, the global charity organisation seeks to boost economies in targeted poor communities and improve the use of US$1-billion a year in aid distributed as cash and vouchers.

At the World Bank IMF annual meeting in October 2019 China cited poverty alleviation when it hinted at plans to extend the use of its proposed digital currency in Africa and the Caribbean.

In November 2019 members of the BRICS bloc said they are considering the use of digital currency.

Several other blockchain-based initiatives have also been recently launched across Africa.

The government of Lesotho signed an MoU with Apollo to implement the technology in its departments to the Cardano Foundation announcing plans to work with over 50 African countries on blockchain governance.

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