Digital Assets Are Rising Fast in Africa

Digital Assets are coming into the fold following moves by JPMorgan and El Salvador, but nowhere moreso than in Africa

In the United States, Wall Street giant JPMorgan Chase & Co has given the go-ahead for its advisors to start offering digital asset funds to retail wealth management clients. This marks the first moment a US bank has considered offering digital asset investments to retail clients.

3,500km away in Central America lawmakers in El Salvador have established Bitcoin as legal tender. This represents the most favourable legalese for the digital asset ever passed. This remarkable move by the Central American nation officially comes into force on 7 September 2021 and is set to stimulate economic growth as the country migrates from a cash-based economy, over one characterised by the seamless efficiency of digital assets at people’s fingertips.

In South America, Paraguay has drafted legislation that seeks to establish Bitcoin as property, as opposed to legal tender. The move sets a wholly different tone for integrating digital assets into the nation’s legal and economic frameworks, and countries around the world are taking note of these progressive yet differing approaches and the effects they will have.

Africa sees massive growth in CBDCs and use of digital assets

Across the Atlantic, appetites for digital assets in Africa are growing fast. Several African governments are in various stages of developing CBDCs (Central Bank Digital Currencies) and private investors are pouring funds into digital asset infrastructure projects. 

Nigeria’s digital Naira is taking the lead in terms of development as the country’s central bank seeks to improve foreign remittances—the nation’s second-largest forex income after oil. The country may launch their pilot scheme before the end of 2021.

The rise of digital assets is understandable in African countries. Governments desire secure ecosystems they can control from a central point, and citizens need a form of currency that’s easy to access and use. Indeed, uptake of digital assets among African citizens is significantly greater than in the West. Almost one in three Nigerians own or use digital assets compared with a mere six out of every 100 persons in the US.

Elsewhere on the continent Tunisia, Morocco, Ghana, Kenya, and Madagascar are researching the possibility of introducing CDBCs and private investors are at various stages of implementing digital asset projects. In Kenya, the digital asset ecosystem Akoin named after and backed by singer-songwriter entrepreneur Akon has successfully rolled out in Mwale Medical Technology City in the West of the country. Residents receive their salaries in AKN to spend on the Akoin Card—providing them with access to payments and other banking services.

It is evident that digital assets are at various stages of becoming mainstream around the world and African countries are pioneering this movement.