Cryptocurrency trading is slowly creeping its way towards emerging economies, and Africa is not the exception. The continent has shown time and time again that it has numerous investors and traders that have been getting interest in entering the industry. However, it often happens that the governments and authorities do not share the same enthusiasm as the crypto community or find reasons to prohibit the activity.
Such is the case of the Republic of Burundi, a nation in the heart of Africa that, this week, banned cryptocurrency trading. However, the reason they provided is a valid one: they do not want to cope with the risks associated with the activity.
Incapable of Providing Protection
According to a Bloomberg report in the middle of the week, the Burundian government listened to claims by people in the country that urged them to ban crypto trading following a series of incidents in which they lost money.
The authorities claimed that they are not capable to provide the necessary protection to users in the crypto space, and that is the primary reason behind the ban of the activity in the African nation.
Alfred Nyobewumusi, currently one of the directors at the central bank’s micro-finance department, provided his comments on the issue at hand and informed the whole crypto community that failing to comply with the decision may lead to trouble.
“Strong measures could be taken against all those who will not respect this decision,” he said knowing that a sizable percentage of the Burundians are not only familiarized with digital assets, but are also interested in trading.
Investing in unregulated crypto exchanges and platforms can lead to trouble, no matter the location. Several scams and fraudulent projects have recently come to prominence, only to rob people’s money with painful impunity.
The Landscape in Other African Countries
A specialized crypto news site recently reported that Dr. Louis Kaskende, who is the deputy Governor of the Bank of Uganda, issued a warning message to the community about the limited protections that the country’s authorities could offer users in the event that they chose to get crypto services from unlicensed platforms.
Kaskende made it clear that the Uganda’s central bank does not have the resources to properly supervise every financial services company or institution, and this activity is currently limited to financial institutions, banks, credit issuers, forex bureaus, and money remittance providers.
Back in May, the Reserve Bank of Malawi explained that digital assets were not legal tender in the African nation, and that they could not substitute the Malawai kwacha (the country’s fiat currency) under any circumstances.
At the time, the Reserve Bank of Malawi Governor Dalitso Kabambe stated that the country’s authorities were not planning to recognize investments in Bitcoin and other crypto assets.
The current reality in Africa is similar to that of developing countries in other locations: the community is attracted to crypto services and digital assets, but most governments and authorities do not feel prepared to offer sufficient protection measures against the dozens of unregulated, legally dubious projects that often end up being scams.
By Andres Chavez