Africa

Kenyan crypto tax bill makes it through parliamentary committee

The Capital Markets (Amendment) Bill will now be introduced to the lower chamber of the Kenyan parliament.

A bill defining crypto assets as securities and imposing capital gains tax on them has made it through a Kenyan parliamentary committee.

According to the Kenyan newspaper Business Daily on Dec.

“This is a very critical law that will guard our country against proceeds of crime and terrorism financing. We approve this Bill for publication.”

After the Committee’s approval, the bill will head to the reading stage in the National Assembly, the lower chamber of the Parliament of Kenya.

The Capital Markets (Amendment) Bill, 2023, amends the country’s tax code, imposing taxes on crypto assets stored on crypto exchanges and digital wallets.

Should the bill pass, citizens of Kenya would be obliged to declare all their crypto assets and their value in Kenyan shillings to the Kenya Revenue Authority.

“A person who possesses or deals in digital currency shall provide the Authority with the following information for tax purposes—the amount of proceeds from the transaction, any costs related to the transaction and the amount of any gain or loss on the transaction.”

While Kenya is only preparing to introduce its crypto taxes, the tax services in other countries have recently been quite vocal in their desire to chase all those who didn’t declare their crypto accurately.

Trezor launches education initiative in Africa, funds Bitcoineta trip

Trezor has officially launched its educational program in Africa in addition to funding Bitcoineta, a West African Bitcoin awareness campaign, and the Africa Bitcoin Conference.

Hardware cryptocurrency wallet firm Trezor is continuing its efforts to promote Bitcoin (BTC) education globally by launching a new educational initiative in Africa.

The Trezor Academy was launched at the Trezor-backed Africa Bitcoin Conference in Ghana’s capital of Accra on Dec.

The academy is an educational program focused on spreading Bitcoin knowledge in Africa.

According to Trezor’s blog, the Trezor Academy pilot has been active in Ghana, Nigeria, Cameroon, Uganda, Burundi and Kenya.

“Bitcoin adoption is perhaps more relevant in Africa than on any other continent,” Trezor CEO Matej Zak said, adding that its properties provide several benefits related to local initiatives such as payment schemes, microfinancing and savings.

As part of Trezor’s education program in Africa, the firm also funds Bitcoineta, a Bitcoin-themed car dedicated to spreading Bitcoin awareness in the West African region, particularly Ghana, Togo, Benin and Nigeria. Bitcoineta was launched in 2018 by nonprofits Bitcoin Argentina and Bitcoin Americana, with the campaign’s name referring to the combination of “Bitcoin” and “camioneta,” the Spanish word for minivan.

According to Trezor, the Bitcoineta campaign is being launched with Bitcoin Cowries, a Ghanian Bitcoin education initiative.

DeFi could solve Africa’s foreign exchange problems, neobank CEO says

The CEO and co-founder of neobank Canza Finance claims that utilizing Baki for foreign exchange trades in Africa creates a hub for African businesses to participate in intra-African and FX trades at a reduced cost.

Forex liquidity and currency swaps are hard to access for many in Africa, which limits the use of United States dollar-based services in the continent’s import-dependent economies. This creates a vacuum that decentralized finance (DeFi) could solve, leveraging cryptocurrencies, blockchain networks and services, according to the CEO of Canza Finance, Pascal Ntsama IV.

Speaking with Cointelegraph, the CEO and co-founder of Canza Finance — a neobank enabling decentralized cross-border payments for Africans — said that Canza’s new DeFi technology, Baki, aims to address this challenge by providing decentralized foreign exchange (FX) for African currencies, enabling slippage-free swaps at central bank rates.

When exchanging local African fiat currencies, funds exit Africa, causing inflation in the dollar value and increased costs due to currency slippages.

DeFi in Africa is projected to show an annual growth rate of 21.99% and reach over half a million users by 2027.

In response to whether Baki’s services would work in countries like Nigeria, where blockchain technology has yet to be broadly adopted even after approval, Ntsama said Baki is built to work with the current regulatory climate as it leverages existing user behaviors to tackle problems with blockchain technology.

Crypto exchange Roqqu receives South African approval to expand operations

Nigerian crypto exchange Roqqu has received the green light to operate in South Africa, providing on and off-ramps to South Africa’s rand currency.

Nigerian crypto exchange Roqqu has been granted regulatory approval to operate in South Africa, allowing users to purchase cryptocurrencies and withdraw funds with the country’s fiat currency, the South African rand, according to local media reports.

South Africa has been a top priority for Roqqu as the exchange seeks to expand its dominance in the African market. In a previous interview with Cointelegraph, the company ranked South Africa as a focal point for its growth plans, which includes reaching 5 million clients in 2023.

Roqqu has its sights set on Ghana, Uganda, Kenya and Tanzania for regional expansion in the near future.

South Africa is one of the biggest crypto and blockchain adopting countries in Africa; and today, @roqqupay just received regulatory approval to operate in South Africa #RoqqucomingtoSA pic.twitter.com/D6rdiIkAFZ

— Roqqu (@roqqupay) April 20, 2023

Roqqu claimed to have over 1.4 million active customers as of January, when it also received a virtual currency license for the European Economic Area, effectively giving it the green light to operate in over 30 countries. It took two years for the exchange to receive permission from the region’s regulatory authorities.

The exchange’s strategy centers on facilitating cross-border transactions through cryptocurrencies, primarily in African countries. According to Roqqu CEO Benjamin Onomor, “Africans who live and work in [the] diaspora send over $5 billion yearly back home; they do so with so much stress and have to wait days in some cases before the funds get to their family members in Africa.” He continued: “This is an issue as many families depend on this remittance for critical needs such as food and shelter.”

Data from Chainalysis shows that the Middle East and North Africa is the fastest-growing region in the world for crypto adoption, transacting over $566 billion in cryptocurrencies between July 2021 and June 2022, up 48% from the previous year.

Cointelegraph recently reported that Africa’s crypto-focused startups raised $474 million in funds last year, a 429% jump from the $90 million figure in 2021. The growth in capital flows surpassed the global average, which only saw a 4% increase in blockchain funding in 2022.

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African blockchain ventures outpace global funding growth: Report

Africa witnessed a 429% YoY increase in venture funding in 2022, with the majority of funding coming from Seychelles and South Africa.

The African continent continues to be a fertile ground for the growth and implementation of blockchain technology.

According to the 2022 “African Blockchain Report” by CV VC, blockchain deals in Africa raised a total of $474 million in 2022, representing a 429% increase from the $90 million raised in 2021. This growth in funding far surpassed the global average, which only saw a 4% increase in blockchain funding.

According to the report, African blockchain funding demonstrated a growth rate that was over 12.5x higher than that of general African venture funding on a year-on-year basis. Overall African venture funding saw just a 34% increase, with $3.14 billion raised across 570 deals.

Africa experienced the highest growth rate in funding globally, while the United States remained steady at $15.2 billion in funding and Asia and Europe saw YoY increases of 50% and 35% with $4.74 billion and $4.88 billion in funding, respectively.

*African blockchain venture funding by countries. Source: CV VC*

Last year, Seychelles and South Africa were responsible for 81% of the blockchain venture funding in Africa, having raised $208 million and $177 million, respectively. Moreover, the total number of African blockchain deals increased by 12% YoY, from 26 to 29.

African blockchain venture funding made up 1.77% of global blockchain venture funding, which saw an impressive 407% YoY increase, with several countries contributing to the surge. By comparison, the U.S. concluded 137 deals while Asia and Europe had 84 and 78, respectively.

Nigeria was the frontrunner when it comes to the number of blockchain startups receiving funding, followed by South Africa, Seychelles and Kenya. However, despite Nigeria having the highest number of deals on the continent in 2022, it only accounted for 3.4% of all African blockchain venture funding, with an average deal size of $1.25 million.

Taking into account the substantial increase in blockchain funding in Africa and the fact that there was a relatively small increase in the number of blockchain deals shows that the median deal size has significantly risen. This suggests that businesses are securing more substantial funding and investors are becoming more confident in African blockchain ventures.

Magazine: Bitcoin in Senegal: Why is this African country using BTC?

Web3 economy to gain more traction in Africa through DeFi-based financial inclusion

DeFi-based financial inclusion serves to increase liquidity and earning opportunities for African micro-entrepreneurs through Fonbnk’s partnership with Tanda.

Web3 in Africa began with cryptocurrency, with blockchain technology bringing a lot of transformation regarding transparency and people’s control over their finances. The Web3 economy in Africa continues gaining traction with decentralized finance-based financial inclusion.

Fonbnk, the Web3 on-ramp that allows Africans to obtain cryptocurrency assets by exchanging their airtime credits, has partnered with Tanda, a merchant network platform in East Africa, to launch an airtime trading marketplace across Tanda’s network of agents.

The partnership between Tanda agents and vendors in East Africa can increase liquidity in the marketplace through the buying and selling of prepaid airtime for profit. This, in turn, can create opportunities for agents to earn revenue and also allow them to store their profits in dollarized stablecoins.

The partnership gives African micro-entrepreneurs more earning opportunities, creating a growth flywheel effect through improved liquidity and marketplace efficiency. This cycle builds trust and generates even more liquidity. Moreover, this partnership enables more African users to participate in the Web3 economy — without requiring bank accounts or cards — by using only their airtime credits.

Although Fonbnk operates throughout Africa, its partnership with Tanda is concentrated in East Africa. Fonbnk plans to expand earning opportunities for African micro-entrepreneurs and bring decentralized finance-based financial inclusion to the masses across Africa.

During the first episode of Cointelegraph’s Hashing It Out podcast, the co-founder of Fonbnk identified the rise in crypto adoption as being due to several factors, such as the chance to earn money, inflation, currency devaluation and the ease of doing business on a global scale.

Web3 can open up an intra-African exchange economy, and it can be used for purchases and transportation between African nations thanks to the ability to be used between borders. It will assist Africans in generating more economic value in the wider market.

According to BitcoinAfrica.io, the top five African countries whose communities are adopting Web3 and crypto are South Africa, Nigeria, Zimbabwe, Kenya and Ghana. They have the most demand for digital currency and the most active local cryptocurrency communities.

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Zambia’s crypto regulation tests to be wrapped by June: Report

According to Zambia Tech Minister Felix Mutati, the country needs digital identities and other necessary digital infrastructures before it introduces crypto.

Cryptocurrency regulation tests aiming to help shape crypto laws in Zambia that simulate the real-world use of crypto are on track to finish by June.

In an April 12 Reuters interview, Zambia’s innovation, science and technology minister, Felix Mutati, said the purpose of conducting the tests was to help the government “see what would happen in the real world,” to assist in forming crypto regulations.

Zambia’s central bank and securities regulator commenced the tests on Feb. 19, which Mutati said was looking to balance safety and innovation:

“Our main goal in the area of cryptocurrency is to strike a balance between innovation in terms of digital payments […] against citizens’ safety, particularly given that cryptocurrency is very volatile.”

Additionally, Mutati stated that before cryptocurrencies can be introduced, digital identities and other digital infrastructures need to be implemented.

Although Zambia’s debt restructuring process has been “long delayed,” with the largest portion of its debt owed to creditors from China, Mutati suggested it hasn’t deterred investment in Zambia.

“What we are seeing is increased appetite to invest in Zambia.”

Zambia was the first African country to default at the start of the COVID-19 pandemic in 2020. In a separate April 12 Reuters report, the country’s treasury secretary, Felix Nkulukusa, said thathe nation could lose the gains it achieved from its macroeconomic reforms if the debt restructuring is delayed further.

We continue engaging people on how we can achieve digital financial inclusion. pic.twitter.com/twoMnmI4BK

— Felix Chipota Mutati (@ChipotaFelix) April 6, 2023

When Mutati initially announced the country would be testing technology for crypto regulation on Feb. 19, he stated that “through digital payment platforms, people will become much more included in digital financial services.”

He added that “cryptocurrency will be a driver for financial inclusion and a change maker for Zambia’s economy.”

Many countries in the African region have made moves toward crypto adoption in recent times.

The Central African Republic made Bitcoin legal tender in April 2022, along with a regulatory framework for the use of cryptocurrency in the country.

It was reported on Dec. 18 that the Nigerian government plans to pass a new law in the near future that will recognize “cryptocurrency and other digital funds as capital for investment,” despite banning crypto activity in 2021.

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Bitcoin gaming enters Africa with local crypto exchange partnership

The Bitcoin gaming economy gets a boost from Zebedee’s expansion into Africa, complementing its Brazil and Philippines operations.

Gamers in Africa can now send and receive small amounts of Bitcoin (BTC) while playing classic titles like Counter-Strike.

Zebedee, a fintech and payments processor targeting the gaming space, has partnered with crypto exchange platform Bitnob to offer payments and gaming reward options in Africa using the Bitcoin Lightning Network (LN).

Within the partnership, African users can earn Bitcoin through Zebedee-powered apps and games. Zebedee’s offering serves as a second layer in games that allows developers to replace vague in-game points rewards with satoshis, the smallest denomination of Bitcoin. Through the partnership with Bitnob, these, in turn, can be converted to a local currency like the Nigerian nairas.

Zebedee’s chief strategy officer Ben Cousens explained that the partnership was driven by game developers who had Bitcoin in mind for tournaments and other gaming rewards.

“If I’m Activision Blizzard or EA Games and I have 30 million players of my games in Africa, and I run tournaments or giveaways, I cannot pay those players on fiat rails — it is too expensive. I am limited to the U.S., and I lose money from loss of engagement. Try sending $0.01 to these territories on another rail,” he said.

“This is about the $180 billion video games market, not play-and-earn or crypto gaming.”

In general, Africa has been a growing area of interest for the Lightning Network, partly due to the LN’s ability to facilitate microtransactions . Bitcoin Senegal founder Nourou told Cointelegraph, “Microtransactions are our economic reality,” hence why he and many other African builders and developers are exploring the LN.

*Gamers can already earn Bitcoin by playing popular games such as Counter-Strike. Source: Zebedee*

Africa benefits from young demographics and a digitally native population. Cousens continued, “We’ve seen consistent evidence of high demand for our platform across the African continent, where the purchasing power of Bitcoin is considerably higher than markets like the U.S. and Europe.”

Indeed, the matchup of LN and gaming is a growing trend during the bear market. Cousens said it’s “A natural evolution of the interactive entertainment landscape, where ‘Rewarded Play’ (in lieu of unsustainable play-and-earn) provides meaningful performance uplift for game developers against a backdrop of slowing growth in mobile gaming revenue while engaging players in a fun and creative way.”

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Africa: The next hub for Bitcoin, crypto adoption and venture capital?

Cointelegraph’s Elisha Owusu Akyaw shares how cryptocurrency is changing the financial landscape in Africa — and the opportunities and challenges that come with it.

The cryptocurrency space has no shortage of skeptics. While many people criticize the environmental impact of proof-of-work blockchains or the proliferation of scams, one particular argument against crypto often stands out: Blockchain has no real use cases.

Every two weeks, Cointelegraph’s The Agenda podcast breaks down this critique and explores the various ways blockchain and crypto can help everyday people.

On this week’s episode of The Agenda, hosts Jonathan DeYoung and Ray Salmond chat with Elisha Owusu Akyaw, Cointelegraph’s own social media specialist and host of the Hashing It Out podcast, to break down how Africans are using crypto to strengthen financial inclusivity and potentially turn countries into hubs of technological innovation.

How crypto is helping everyday Africans

According to Akyaw, crypto offers a more convenient, affordable way to send money both regionally and around the world. “Western Union, MoneyGram and all of these money transaction firms or rails have made millions from Africa for so long” by charging high fees, said Akyaw, whereas the cost required to send money via crypto is significantly lower.

Bitcoin (BTC) also offers a better store of value for most Africans than local fiat currencies, Akyaw argued. Speaking on his own experience of living in Ghana, he said that “you can buy Bitcoin and keep it for the next one year or six months. It’s a better hedge against inflation than keeping the Ghanaian cedi.”

Finally, the crypto industry is opening up new opportunities on the continent. “At every point of development, Africa has been left behind,” said Akyaw. But the global nature of the industry and the fact that it’s still in its early development present a unique opportunity to participate and benefit from its growth.

“This is one of the first times where there is a big shift happening and Africans are able to contribute. Africans are able to benefit directly from the shift that is happening without it having to pass through an intermediary, which is usually the state. And I think it’s an amazing thing.”

The next Silicon Valley?

When asked about what it would take for countries in Africa to become “magnets for crypto builders or a new kind of Silicon Valley,” Akyaw pointed to two factors that need to be improved for developers, startups and fintech companies to want to make the continent their home: regulation and infrastructure.

Umm. So I met @jack at the @AfroBitcoinOrg Conference.

I have been smiling since pic.twitter.com/SJKjkU6nAb

— Elisha – GhCryptoGuy (@ghcryptoguy) December 5, 2022

The majority of African countries lack proper regulation, according to Akyaw, while also condemning the use of crypto. This means companies are often unable to obtain licenses to set up shop and residents are dissuaded from interacting with Web3 protocols and firms:

“You can’t get a license. You can’t work with a bank in the country. You can’t do a lot of things. So, it makes no sense for you to come in.”

The other thing that needs to change, said Akyaw, is that electric grids need to be more stable and internet needs to be more reliable. “If you want a lot of Big Tech companies to come in, they must have great, 24/7 electricity. Internet must be awesome because a lot of what we do in the crypto space is virtual.”

To hear more from Akyaw’s conversation with The Agenda — including his backstory, whether outside funding has any negatives and the potential near-term future of crypto in Africa — listen to the full episode on Cointelegraph’s Podcasts page, Apple Podcasts or Spotify. And don’t forget to check out Cointelegraph’s full lineup of other shows!

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How blockchain can help reimagine a new state in Africa

Eche Emole, the co-founder of Afropolitan, explains how the nation-state experiment has failed, especially in Africa, and how blockchain can be used to reimagine a new state.

On episode 12 of Cointelegraph’s Hashing It Out podcast, Eche Emole, co-founder of Afropolitan, explains what it means to build a country on the blockchain.

From an event and media company, Afropolitan has transitioned to a blockchain-based state of Africans on the continent and in the diaspora. Emole, an African in the diaspora with a political science, philosophy and law background, believes the nation-state experiment has failed in Africa. According to him, the existing state structures have stifled the development of people on the continent.

“We truly believe that the nation-state experiment has failed for Africans globally. It has yielded nothing but poverty, weakness, corruption, and it very stifling.“

The co-founder of Afropolitan explains that the inspiration to build a network state comes from an article titled “How To Start a New Country,” written by former Coinbase chief technology officer Balaji Srinivasan, who has recently been in the news for a $2 million bet on Bitcoin reaching $1 million in 90 days. Another piece of literature that inspired the creation of Afropolitan is the first of the federalist papers, published by Alexander Hamilton.

According to Emole, the plan to build Afropolitan will occur in four phases: building a community, offering governance as a service, becoming a minimum viable state and securing land for the real-life version of the state, featuring a Chinatown and an embassy.

Emole believes that another reason why Afropolitan is necessary is the lack of opportunities that exist for Africans. Emole explains that the issue is a two-part problem beginning from the point where most Africans are not in the rooms where major decisions are being made. Moreover, the lack of cross-industry communication prevents collaborations between Africans in a way that solves problems.

Elisha (GhCryptoGuy) and Emole also discuss the hurdles of creating a nation on the blockchain, the future of crypto in Africa and Vitalik Buterin’s visit to the continent.

Listen to Hashing It Out Episode 12 on Spotify, Apple Podcasts, Google Podcasts or TuneIn. You can also check out Cointelegraph’s full catalog of informative podcasts on the Cointelegraph Podcasts page.