Blockchain technology grapples with an image problem in Africa
By Vakindu Philliam on The Capital
On February 14th, 2017, Bank of Uganda, Uganda's central bank, issued a press release that warned its public to stay away from trading in cryptocurrencies. The statement by the Bank's Governor warned that dealings in Cryptocurrencies like Bitcoin, fell outside the regulatory purview of Uganda's Central Bank.
Uganda isn't the only African country struggling to regulate blockchain-based assets. Ghana's Securities and Exchange Commission (SEC) issued a brief public notice in January 2018, discouraging its citizens from investing in unregistered and unlicensed trading platforms that have gained prominence worldwide, including BTC, ETH, LTC, saying that cryptocurrencies are not recognized as legal tender in the country.
This scenario is similar in most African countries, where the legal status of blockchain-based assets is at best mirky, and in extreme cases, illegal — like is in Burundi. Blockchain technology has an image problem on the continent. The fear of everything blockchain on the continent arises mainly from misinformation about the technology. Many citizens on the continent have lost millions of dollars to online get-rich-quick cryptocurrency scams.
Recently the Uganda Police Force shut down Dunamiscoin, a pyramid scheme purporting to be a cryptocurrency investment platform. By the time Uganda's Financial Intelligence Authority (FIA) froze their accounts for operating a Ponzi Scheme, the company's owners had swindled $2.7 million from their victims. It's such bad episodes that taint the image of blockchain technology on the continent and hinder it's widespread embrace and adoption.
Yeah, I know, Blockchain technology isn't just about cryprocurrencies. But try explaining that to the average cryptocurrency trader who only wants to make a safe investment for the future. Until the continent learns to differentiate between blockchain technology and cryptocurencies, the former will continue to be used as a byword for online scamming.
Despite the hurdles, some African countries seem to see great potential in blockchain technology and are trying to use it to solve some of the continent's most potent problems.
Kenya hopes to adopt blockchain technology to make its election process more transparent. Kenya's 2007, 2013, and 2018 elections were mired with allegations of vote rigging and systems hacking. Could blockchain's immutability traits help to solve Kenya's election issues? Only time will tell.
And in Nigeria, a group of transporters from the Nigeria Union of Road Transport Workers (NURTW) plans to use blockchain ledgers to improve interstate road transportation. They hope blockchain's tamper-proof properties will help improve safety, record keeping and insurance for road travelers. Cargo delivery and Logistics is notoriously bureaucratic and time consuming. Maybe blockchain can help create a more seamless way of handling goods in transit.
All said, not all is doom and gloom for blockchain on the continent.
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