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The Future of Digital Currency in Africa - ACCPA

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Sunday, July 09, 2017  11.35AM / ACCPA blog Jan ed

Like many churches across Africa, the United Family International Ministries in Harare, Zimbabwe has always collected Sunday offertory by passing around a bowl of cash from pew to pew. This manner of collecting offertory has become deeply engrained in Sunday worship at the church alongside singing and dancing.

 

However, in November 2016, the church introduced a new way of making offertory – they brought in card swiping machines to take electronic offertory. Some congregants were a bit skeptical because they did not know how this new system was going to affect their Sunday offertory as swiping a card is not the same as dropping cash in a bowl where you can see and feel the cash.

 

In fact, what is happening in Zimbabwe is not an exception. In Kenya, practically every terminal, including taxi drivers, now accept cashless payment through Mpesa. This is the new trend across Africa, where mobile money and other forms of cashless payment platforms are replacing paper money. This trend in Africa is consistent with a global trend that favors electronic money and digital payments over paper currency. Going cashless is now the norm in many parts of Africa, especially with the introduction of mobile money in the last few years. Mobile money has allowed Africa to by pass conventional Western structures to embark upon an alternate form of digital currency.

 

Alongside this digital currency revolution is the emergence of cryptocurrency. The rise of cryptocurrency in Africa adds another layer of complexity to the digital currency revolution. The growth of Bitcoin in some parts of Africa – like South AfricaGhanaNigeria, and Kenya – has drawn attention from concerned regulators. In November 2015, the government of South Africa introduced a cyberlaundering bill to properly regulate electronic and digital transactions in cyberspace. In January 2017, the government of Nigeria issued a ban on Bitcointransactions in an attempt to curtail the activities of Bitcoin exchange operators like NairaEx. In Zimbabwe, the government is currently drafting a regulatory guideline on Bitcoin which it plans to introduce soon. Surprisingly, Ghana and Kenya are yet to take any significant regulatory action on the issue of cryptocurrency and cyberlaundering.

 

Digital currency is growing at an increasingly rapid pace. Digital currency was first perceived as a risky way to conduct transactions. It is rather ironic that today digital currency is increasingly being preferred over paper currency. Card swiping is gradually disappearing in the U.S and U.K where touchless forms of electronic payment are preferred at the terminal. For example, in the U.S., Starbucks (big chain coffee shop) prefers customers to scan their phones at the terminal to make payment. Africa is responding to this global trend in digital currency in many ways. In November 2016, Senegal became one of the first countries in the world to announce the introduction of a blockchain-based national digital currency which it plans to use alongside the CFA Franc. This idea of a blockchain-based digital currency is new in Africa and it is being spearheaded by Senegal. Very soon other African countries will follow suit.

 

What does the growth in the use of digital currency mean for the African compliance sector? Are we prepared for the challenges ahead? Our profession is still in its infancy yet we are constantly being tasked with global-level demands. The world is not waiting for us to sort out our compliance issues before more complex functions are introduced. Compliance is an exciting career with a bright future in Africa. What we need now is a new generation of informed and certified compliance professionals to rise to the challenge of protecting the integrity of Africa in an increasingly complex financial world.

 

Source: ACCPA

 

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