After the failure of the FTX cryptocurrency exchange, the International Monetary Fund (IMF) wrote a blog post advocating for greater oversight of the region’s crypto sector in Africa.

Countries like Nigeria on the continent of Africa are among the world’s leaders in the cryptocurrency sector, which is expanding at an unprecedented rate.

There have been “prompting renewed calls for greater consumer protection and regulation of the crypto industry,” the IMF said, citing FTX’s demise as evidence. The governing body thinks that by increasing their oversight, they can better safeguard African crypto users.

The blog states:

“Policymakers are also worried that cryptocurrencies can be used to transfer funds illegally out of the region and to circumvent local rules to prevent capital outflows.”

IMF believes that the “widespread use of crypto could also undermine the effectiveness of monetary policy, creating risks for financial and macroeconomic stability.”

The article stated that there were obvious dangers associated with cryptocurrency and that “it’s time to regulate” to assist reduce those dangers while still placing an emphasis on innovation. The IMF has warned that using cryptocurrency as legal cash brings additional dangers. The experts fear that using cryptocurrency as legal tender will put a strain on the treasury.

According to IMF data, only one-quarter of sub-Saharan African countries have enacted clear laws for cryptocurrencies, while the remaining two-thirds have some restrictions in place.

Tanzania, Ethiopia, Sierra Leone, Cameroon, and the Republic of the Congo are just some of the sub-Saharan African countries that have outlawed cryptocurrency.

On the other hand, Kenya, Nigeria, and South Africa account for the region’s greatest concentration of crypto users.

Crypto Adoption In Africa

The value of the African cryptocurrency market increased by over 1,200% between July 2020 and June 2021, with considerable adoption occurring in Nigeria, South Africa, Kenya, and Tanzania, as reported by analytics firm Chainalysis.

Meanwhile, This past Monday, the Kenya Revenue Authority (KRA) began cracking down on the country’s estimated 4 million cryptocurrency holders.