Africa has lately mitigated innovation and technology adoption by approaching the blockchain sector. Although cryptocurrency used to be banned in the continent, some countries shifted their attention towards blockchain technology to bring more opportunities within.
Africans are known to contribute to mining and investing in crypto significantly, so if you want to buy bitcoin with credit card or sell or trade it, the African government doesn’t hinder it, but more regulation must be settled. Considering the technological ecosystem, Africa, Nigeria, Kenya, South Africa and even Ghana are doing efforts to adopt blockchain while crypto transactions increase.
The Central African Republic adopted Bitcoin last year, but the country isn’t prepared for full crypto adoption. Instead, blockchain could contribute to smooth crypto acceptance. Let’s see what Kenya has done to help the continent achieve adoption.
How Abu Dhabi plans to help Kenya
The Kenyan government reached out to Abu Dhabi official bodies for a collaboration supported by the Venom Foundation, a blockchain platform that provides infrastructure for Web3 applications. The new alliance aims to bring innovation and development in Africa in sectors like finance, supply chain, agriculture, business and cross-border trade. The African government will use the upcoming blockchain solution to enhance knowledge exchange and stakeholder collaboration.
The Venom Foundation is set to ensure Kenya has all the tools necessary to boost digital transformation. With this movement, Kenya stands firm regarding the benefits of such investment for people around the globe, although it used blockchain before. In 2022, the country aimed to enhance farmer incomes and food supply chains by collaborating with an Australian-based blockchain solution to reduce waste and improve food availability by helping locals sell directly to traders, benefiting from fair prices.
Kenya introduces the Finance Bill 2023
With the massive 429% increase in blockchain deals, Africa continues its technology venture by introducing a tax on crypto and NFT transfers. The country’s taxing legislation is called the Finance Bill 2023 and proposed a 3% tax on cryptocurrency for NFT and 15% on monetized online content. The ones susceptible to collecting it include exchanges registered in Kenya or other initiators of the transfers.
Although this is a further step toward development and adoption in Africa, the tax legislation wasn’t positively received by everyone. That’s because, compared to other exchange platforms, the 3% fee is seen as exaggerated ―Binance charges only 0.10% for trading.
Kenya is among the first 20 countries to mitigate crypto adoption, along with Vietnam, Nigeria, Indonesia and Ukraine. But Brazil, China, Turkey and Argentina have also made efforts to adopt cryptocurrency in one way or another.
The acceleration of crypto adoption in Abu Dhabi
Abu Dhabi is among the leading crypto hubs in the Middle East, being also a free trade zone, leveraging no taxes on cryptocurrencies. With independent regulators, UAE has a relaxed approach to crypto to support the development of FinTech and help crypto brokers, trading platforms and blockchain innovators. Abu Dhabi became the gateway to connect UAE’s traditional financial sector and the crypto industry to provide regional growth and a broader crypto economy.
Dubai recently introduced a new regulatory framework on cryptocurrencies by providing a licensing regime for digital asset issuers and service providers. Therefore, any form of business offering crypto-related services must look into authorization and licenses to abide by the requirements.
But Abu Dhabi didn’t only collaborate with Africa; what makes it a hub of innovation includes cooperation with Asia and the entire Middle East. A recently launched official body between the three areas called the Middle East, Africa & Asia Crypto & Blockchain Association (MEAACBA) is set to develop the growth of fintech businesses of UAE by leveraging regulatory solutions and creating commercial opportunities to support industry growth.
UAE and Hong Kong cooperate for the development of fintech
Despite China’s position on cryptocurrency, the country collaborated with UAE to boost fintech businesses by forming a joint working group to improve virtual assets regulation. The growing relations between the UAE and China have only deepened recently, with China having an energy deal with the Emirates. The countries have also signed a few agreements on nuclear energy, the automobile industry chain and investment banking.
Along with cooperating with several countries, Dubai intends to attract top crypto talent, which is why it developed the Dubai World Trade Centre as a free zone for businesses to leverage foreign ownership, zero corporate tax and company start-up packages.
Why blockchain collaborations between countries matter for crypto adoption
Bitcoin adoption is expected to happen eventually but it can’t occur without countries and prominent powers contributing. Although cryptocurrency expanded with the help of crypto communities, from developers to investors and traders, when it comes to adoption, regulation needs to be included to make cryptocurrency trading safer.
El Salvador is the first to come to mind when discussing leading the blockchain adoption. The country’s approach wasn’t fit for the economy and current situation, but emerging towards Bitcoin adoption was a big step toward change. Singapore, UAE and South Korea have also taken the responsibility for creating crypto regulations to offer locals and businesses a chance for expansion regarding transactions and opportunities.
In terms of importance, blockchain is more valuable than cryptocurrencies because it offers the opportunity to create platforms for individuals and businesses. Without blockchain, cryptocurrencies wouldn’t have much value since there are no digital structures for them to be used. Especially in Africa and other similar regions, the adoption of blockchain is expected to bring innovation. At the same time, crypto investing and trading is only a way for people to get accustomed to this technology. However, experts say blockchain can lead to more business competitiveness, for which less developed countries are still not ready.
A new agreement between Kenya and Abu Dhabi is set to bring blockchain innovation to Africa using a blockchain-based platform. With the Venom Foundation’s help, Kenya can access digital tools and knowledge to improve sectors like finance, agriculture and cross-border trade. Africa is mitigating blockchain development to help the continent flourish and benefit from its emerging markets.