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After Donald Trump's election victory and the US, traders are betting on good times for cryptocurrencies. With bitcoin breaking the ninety thousand dollars barrier.
The market value of bitcoin is now the eighth most valuable asset in the world, and it surpassed the total world's value of silver at one point seven six trillion dollars.
It's incredible as even those in the crypto community watch what was happening.
This week with AWE because it was such a stunning rise.
With the currencies growing increasingly popular among younger people. Are African governments, wary of unregulated markets able to stand this latest onslaught.
The crypto space, the fintech space is a new deal, and being a new deal last regulators, we're always very cattious. We need to understand it properly, We need to review it properly. We need to also be able to deal with the risk associated with that. One of the aims of the SEC's investor protection, and of course the other one is market development. And in the space of that twin aim we must do what we need to do to protect Nigeria's and to encourage Nigerians as the case may be.
On this episode of the Next Africa Podcast, we'll look at how young people in Nigeria and Kenya are still using crypto despite attempts to ban it and what governments might, if anything, be able to do about it. I'm Jennifer Zabasaja and this is the Next Africa Podcast, bringing you one story each week from the continent, driving the future of global growth with the context only Bloomberg can provide. And joining us this week is Bloomberg's Bella Genga in
Nairobi and also amel Onu who is in Legos. Thank you both for being here. A really fascinating topic that I think a lot of people are plugged into right now, especially considering the price action. Maybe let's just start with the popularity of cryptocurrencies like bitcoin on the continent right now. I mean, how would you assess how popular it is and really who the people are that are using it? Bella, maybe you start.
It's pretty popular. Young people especially are using it because they are tech savvy and it's efficient. They just go and participate it on the platform's online. They don't have to get out of the house of the room and go and find it and they are trading and making money, which without leaving the house. So that's why it's very popular among young people.
Tenure Emeli, how about you from from West Africa? What what's your perspective?
Crypto is very popular among young Nigerians. It's mainly young Nigelians that are patronized in it, mainly those that are looking for smart ways of transacting business and good returns and a still protect the investments. So thats where we normally see the drive coming from.
I spoke to two guys and they've been in the crypto game since like twenty twenty and so they are enjoying the benefits or they're enjoying the escalation of crypto because they can change and they can trade. Basically, these guys are making a lot of money. These young people are making a lot of money. They don't have to go to banks because in Kenya the Central Bank issould as circular telling banks we don't want to hear you
guys are doing anything concerning crypto. So all of it is peer to peer at this point, So that's.
One use case. I mean people are making money also transferring money peer to peer. MLA, are you seeing similar patterns and what sort of tokens are people using.
It is mainly bitcoin, Yeah, every other one is like an exception. They're not popular and emla.
I mean, what is the attraction from the perspective of the people that you've spoken to. Is it about making money? Is it about speculation? Is it a game? Is it to evade sort of their own woes that the local currencies are experiencing. I mean, what do you.
Think, Ageria, those actually going for a bit or tripito currency, their fraction is mainly as a start of value, that is merely to preserve their wealth. So I bet that is the elemental speculation because they are doing need to have kind of sharp appreciation and their assets within a very short time, but they maintain is that lots of confidence on the naira, lots of confidence of the local currency is making people go to it, especially the young people. They want to try new things.
Bella.
A few months ago we had you on the podcast and you were talking about a lot of the movement that we were seeing in Kenya in response to cost of living and how a lot of it was young people and how they were communityting online. I mean, I wonder if we're seeing some of that same chatter happening right now, especially as we see the prices of these
cryptocurrencies I mean continuing to escalate. I mean, are you hearing them talking potentially about this being an opportunity to store value like a MELI was saying.
Yes, it's definitely an opportunity. I mean, look, if you look at it, bitcoin is up above ninety three thousand, so you can imagine the people who are already participating in that space in twenty twenty. And if you look at the employment rate and employment rate in Kenya, it's pretty high. The Tenet government is under pressure to increase revenue collection in the form of taxes, and so the
price living expenses have gone up. And when you consider people who don't have jobs, people these young people who get a lot of income online, this is a space that they're particularly very keen on and are playing at. The people who are basically smiling and laughing all the way to the bank are people who started playing before. Actually two thousand and I met one of the one of the participants or one of the investors in this space got in very very early. I mean, you're building a house.
It's okay, Bella MLA stick with us when we come back. We're going to talk about how regulators are reacting to this increased use and if there's anything they can really do to stem the increasing use and the tide that we're seeing with crypto. Welcome back today on the podcast. We're looking at the impact of the booming cryptocurrency markets, especially since the US election, and we're seeing the prices of not just bitcoin but other cryptos rising, lifting all tides.
As we could say a la, Nigeria has had a pretty fractured relationship with crypto. I think it's safe to say, can you can you give us some history about where the country has been and where it's at now.
Twenty twenty, young Nigerians used bitcoin to fund a major protest against police rutality. So central bank was unable to track those flues and it was a major concern to the authorities. So in twenty twenty one, CENTA bank or that banks to close all accounts operating crypto. They said it was a threads to the stability or the financial system. Then the next year what we saw was et cetera Bank non fined four banks for failing to comply with
the order to bank crypto assets. Notwithstanding that the analysis we got indicated that more Nigerians we were piling up into crypto. The Central Bank d year blocked assets to crypto a change that is binance, making it very difficult or impossible for subscribers or cretain users to continue to reutonize that platform. And they also sued them for manipulating
the national currency. The Nigerians Securities and the Change Commission, which is the regulator for the capital market, has always seen the crypto asset as a security that should be regulated and SEX believes that if it is regulated, it will make the participants and the market not to be sabottaging the economy, which actually has been the fears of the central bank. Sec also felt that there are a lot of young people in it, so if you don't regulate it, what it means is that a lot of
them could be taken advantage of. So eventually, what we say is that there is not an agreement to regulate the market. And this year the license to crypto exchanges. They want to get good understanding of how they pread and if they're satisfied with what they then they will grant them a permanent license.
WOW and that would be huge, of course for the industry, and it's not as you just described there in La, it's not been smooth sailing. Of course, we've seen a lot of disruption as you were just mentioning there. But also earlier this year we talked a lot about the situation with the Binance executive and how that played out. Bella, let's bring you in. Can you talk to us from the Kenyan perspective, because it's also not really been smooth sailing for crypto in East Africa either.
Absolutely. I remember in twenty fifteen, the Kinon Central Bank issued US cycula actually basically declared during a press briefing that look, one of the entities that were making it available was basically a crypto exchange. It was fatilitating crypto trading and all that. It declared that this company has no license and therefore they do not have they cannot
do any business in this country. And then that who's followed up by a circular to all commercial banks asking them not to do any kind of business with anything sounds like, smells like, looks like crypto. And what has happened is today if the crypto enthusiasts are still using the banks the founder way of using the banks. But if a bank realizes or finds out that a particular entity or company is trading or dealing with crypto, they
shut down the bank account. We've had some of the exchanges getting shut down because they're not getting licenses and there's no regulation in this space for crypto. They have been forced to find a way around it, and one of the ways is to open different bank accounts with different banks, and that's how they're able to survive or you know, continue to earn from this trade. The other thing is any regulator who finds out that you are participating or have any business to do with crypto, they
will shut down as well. There's still no regulation on crypto currency. It's not allowed, it hasn't been banned, so that its people who are participating in crypto or dealing with crypto are playing in a great space. So the absence of regulation, it's not hampering people, and people are still able to deal and participate in that place in that space.
Basically, before we wrap up, maybe MLA, can you take us through what you're watching for next. There's a lot that's up in the air, including the price of some of these cryptocurrencies. But what should we be watching for next?
What everybody is watching for, including those that are into a crypto and those that are not tayfun into a crypto. What everybody is watching up for is the type of regulation that you'll be placed from next year when SEC will give permanent licenses to need to operate US. If it is satisfied with however Writting is operated, then those two operators ill be giving permanent licenses next year and
be given a guideline how to operate. That is the next thing everybody is looking at for web SEC deny those two people the permanent licenses or will it make the conditions stiffer for them to operate?
For as long as the authorities do not have visibility, they cannot measure, they cannot manage these spaces. So we'll see how the government or whatever kind of regulations that the states will try to come up with on this space will play out. Because for as long as they don't have visibility, how do they proceed? You will not see any crypto enthusias coming to volunteer right still waiting to see that happening.
Here, And you can of course read our full coverage of Crypto across Bloomberg platforms. Here's a few other stories we're watching in the region.
This week.
Resolute Mining shares were temporarily suspended as Molly demanded the Australian gold miner pay about one hundred and sixty million dollars to resolve a tax dispute that seen its chief executive officer detained. Terry Holahan and two colleagues have been held in the capital of Bamaco since late last week after the Resolute boss traveled to the city for meetings
with the nation's tax and mining authorities. The detention comes as the military rulers of Africa's third largest gold producer ratchet up pressure on mining companies to renegotiate contract terms, and South Africa started allowing some movement at its main border with Mozambique on Thursday morning after protests prompted a
suspension the day before. Mozambique has been racked by the worst election unrest since the end of its sixteen year civil war in nineteen ninety two, after opposition leader Venancio Mondlane claimed victory in an October ninth election that official results showed the ruling party one by a landslide, and you can follow these stories across Bloomberg, including the Next African Newsletter. We'll put a link to that in the
show notes. This program was produced by Adrian Bradley. Don't forget to follow and review the show wherever you usually get your podcasts. I'm Jennifer's Abasaga. Thanks as always for listening.