September 25, 2018

Bitcoin Regulation and Laws in Africa

bitcoin btc in africa

A quick search on Google Trends shows that 3 African countries rank in the top 10 globally for the term “Bitcoin” when it comes to the volume of searches. These countries are South Africa (1), Ghana (7) and Nigeria (10) respectively. This shows that there is a growing interest in Bitcoin (BTC) and alternative cryptocurrencies in Africa.

But, how do the authorities in Africa view cryptocurrencies? Are there laws pertaining to the treatment of cryptocurrencies?


Top 5 Bitcoin Countries in Africa

  1. South Africa (1)*
  2. Ghana (7)*
  3. Nigeria (10)*
  4. Kenya (37)*
  5. Morocco (53)*

(Global Search Volume Rank)*


Bitcoin Regulations in South Africa

Is Bitcoin legal in South Africa?

Bitcoin and cryptocurrencies have no legal status or regulatory framework in South Africa. This means that cryptocurrencies are unregulated. One is free to trade cryptocurrencies at their own risk in South Africa.

*Update[16/01/2019]: The South African Reserve Bank recently released a consultation paper on policy proposals for crypto assets where it outlined how it plans to regulate cryptocurrencies. The document stated that cryptocurrencies will be moved from a level 2 (cryptocurrencies recommended) to a level 4 (cryptocurrencies regulated) owing to the risks associated with the cryptocurrency industry. SARB has said that they will increase regulatory pressure “[in order to achieve anti-money laundering/combating the financing of terrorism (AML/CFT) requirements, more specific requirements will be necessary in line with the recent amendments to the Financial Action Task Force (FATF) Recommendations.”

Cryptocurrency tax law in South Africa

In South Africa, cryptocurrencies are not regarded by SARS as currencies for income tax purposes, instead, cryptocurrencies are regarded by SARS as assets of an intangible nature. SARS further states that for the 2018 annual budget review, the VAT treatment of cryptocurrencies will be reviewed.

*Update: The National Treasury and the South African Revenue Service are proposing that cryptocurrency must be categorised as a ‘financial instrument’. If this becomes law, it will prevent South African crypto companies from being able to claim the research and development (R&D) allowance.


Bitcoin Regulations in Ghana

Is Bitcoin legal in Ghana?

In January 2018, The Bank of Ghana released a statement saying that the trading and use of Bitcoin in Ghana was not yet legal as it was not recognised as a legitimate form of currency. However, at the time, there was a bill called the Settlements and Payments bill planned for the near future, which would cater to the use of cryptocurrencies once the bill is passed by Ghanaian lawmakers.


Bitcoin Regulations in Nigeria

Is Bitcoin legal in Nigeria?

Cryptocurrency is unregulated in Nigeria. In January 2017, The Central Bank of Nigeria announced that bank transactions in virtual currencies were banned in Nigeria, however, the bank has since clarified it’s stance on Bitcoin, stating :

“Central bank cannot control or regulate bitcoin. The Central Bank cannot control or regulate blockchain. Just the same way no one is going to control or regulate the Internet. We don’t own it”

Cryptocurrency tax law in Nigeria

According to Nigerian Law Today, cryptocurrency companies operating in Nigeria do not pay more tax compared to other companies. Nigerian startup’s and consumers will have to wait for the government to release a legal framework for the regulation and taxation of cryptocurrencies.  


Bitcoin Regulations in Kenya

Is Bitcoin legal in Kenya?

Bitcoin and cryptocurrencies are currently unregulated in Kenya; which means it’s not illegal to use cryptocurrency in Kenya. Nevertheless, you do so at your own risk without a regulatory framework to protect you.

However, in July 2018, the Kenyan parliament tasked Kenya’s Treasury Secretary to investigate the current state of cryptocurrency adoption in the country and to advise parliament on how to proceed with cryptocurrency regulation.

The Governor of The Central Bank of Kenya, Dr Patrick Njoroge, was opposed to cryptocurrencies in the past but the bank seems to be warming up to the idea of cryptocurrencies now as evidenced by an article published earlier this year (May 2018) which read:

“CBK Governor Patrick Njoroge said the regulator was open to introducing cryptocurrencies such as bitcoin as alternative payment vehicles with the opportunity to reduce fraud.”

Cryptocurrency tax law in Kenya

Although cryptocurrencies are not recognised as a legal tender by the Central Bank of Kenya, earnings from cryptocurrencies are not excluded from taxation. Income derived from unregulated activities, such as cryptocurrencies and cryptocurrency mining, are subject to tax. Profits from trading and mining cryptocurrencies should be reported.

Bitcoin Regulations in Morocco

Is Bitcoin legal in Morocco?

Cryptocurrencies are illegal in Morocco. 

Morocco officially outlawed cryptocurrencies in November 2017, following an announcement made by Moroccan digital services company, MTDS, that it would start Bitcoin payments. Thus, if you are caught making cryptocurrency transactions, you will receive a fined. 


Cryptocurrencies are mostly unregulated in Africa. While governments figure out how to regulate cryptocurrencies, cryptocurrency exchanges like Coindirect, are using AML ( Anti-Money Laundering) solutions and KYC (Know Your Customer) to protect customers and prevent their platforms from being used for criminal purposes. 


Access our integrated Cryptocurrency Exchange platform and #OwnTheFuture with Coindirect.

Disclaimer: This article should not be taken as financial advice. Never invest what you can’t afford to lose as the cryptocurrency market is volatile. Always research as much as possible before buying any coin.