DeFi protocols expanded total value locked from $5 billion in 2020 to $190 billion by late 2024, while blockchain startups raised $11.5 billion in 2024.

Central banks are racing to issue CBDCs, with 94 per cent exploring retail or wholesale digital currencies, exemplified by mBridge, e-krona, Sand Dollar, and eNaira pilots. 

Yet, Africa accounts for just 2.7 per cent of on-chain volume and only 25 per cent of countries have crypto laws, risking marginalisation amid regulatory uncertainty.

Emerging markets highlight Africa’s opportunity. Latin America’s Brazil, Argentina and Mexico rank among the top 20 adopters—driven by inflation hedging and remittance efficiencies—while Southeast Asia’s Vietnam, the Philippines and Thailand embed crypto in commerce and DeFi.

Eastern Europe’s Ukraine and Russia leverage on-chain transfers for cross-border finance.

Africa’s median age of 19.7, with nearly 60 per cent under 25 by 2030, underscores its digital-native youth, yet youth unemployment exceeds 30 per cent. 

Crypto and DeFi can unlock peer-to-peer SME financing, agribusiness microcredit, gig-economy remittances and tokenised entrepreneurship.

Delay risks capital flight, brain drain and widening inequality.

Despite crypto’s promise, most African governments have yet to enact dedicated legislation.

An IMF survey found that only 25 per cent of Sub-Saharan countries formally regulate cryptocurrencies; two-thirds impose restrictions and several maintain outright bans. 

Ghana, Kenya, the Democratic Republic of Congo and Algeria remain in legal limbo, depriving entrepreneurs and investors of clear guardrails.

Consequently, African crypto ventures raised just $1.12 billion in 2024 compared to Latin America’s $2.7 billion in 2022. 

Informal and peer-to-peer markets flourish outside regulatory oversight, amplifying fraud risks, laundering concerns and consumer harm.

In these regulatory vacuums, global exchanges—led by Binance’s 52–72 per cent market share in Africa—dominate trading volumes, diverting fee revenues offshore and stifling local innovation.  

Without minimum licensing requirements, local-entity provisions and market-integrity standards, African economies cede control of their digital-finance ecosystems to external incumbents, forfeiting opportunities to build homegrown platforms and retain economic value. 

Regulated crypto markets can transform key sectors. DeFi protocols offer a path to bridge Africa’s $331 billion SME financing gap by enabling on-chain credit scoring and collateral-efficient lending.

Agricultural tokenisation—issuing blockchain-verified warehouse receipts and crop-yield derivatives—can channel global liquidity into smallholder farms, shortening payment cycles and reducing counterparty risk.

Diaspora remittances totaling $54 billion in 2023 currently incur average fees of 7.9 per cent; licensed stablecoin corridors could cut costs below two per cent and settle transfers in minutes.  

Under the African Continental Free Trade Area (AfCFTA), tokenised letters of credit and digital documentation can slash intra-African trade settlement times from weeks to hours, unlocking projected GDP gains of up to $450 billion by 2035.

Even climate finance stands to benefit: tokenised carbon credits provide transparent verification and attract private-sector funding for reforestation and renewable-energy projects.

Africa’s youth-led fintech ecosystem exemplifies what supportive frameworks can unleash. Nigeria’s Yellow Card operates in 20 countries, processing over $3 billion by late 2024, while Chipper Cash grew from two million to five million users in a year, generating over $100 million in revenue through free peer-to-peer payments.

South Africa’s VALR serves 600,000 retail and 1,000 institutional clients across spot, margin, futures and staking products. Micro-startups such as Fonbnk bridge prepaid airtime to stablecoins with a nine-person team, demonstrating lean, high-impact innovation.

These ventures highlight how regulatory clarity can attract investment, scale operations and create jobs across legal, cybersecurity and customer-support sectors.

Realising this potential demands a unified, multi-stakeholder strategy. Policymakers should adopt harmonised licensing frameworks under the AfCFTA Digital Trade Protocol, embedding “same activity, same risk, same regulation” across ECOWAS, the East African Community (EAC) and SADC.

A Pan-African “crypto rail,” layered on the Pan-African Payment and Settlement System (PAPSS), would enable regulated stablecoins and tokenised securities to clear continent-wide within minutes. Education and skills development must scale through blockchain curricula at universities, certification by the Africa Blockchain Institute and public–private scholarships for technical colleges and online learners.

“Crypto councils” comprising regulators, industry, academia and civil society can co-create policy, oversee sandboxes and monitor market integrity, while innovation hubs seeded by the African Development Bank can co-host stakeholders to co-design solutions aligned with Agenda 2063’s vision of a digitally empowered, united and prosperous Africa.

Governments must mandate clear disclosure standards—volatility dashboards, risk warnings and historical performance data—and enforce liability for platforms that fail to report or remediate fraud. Digital-ID integration, leveraging foundational ID systems in 22 countries, will underpin robust KYC/AML processes and transaction monitoring.

Infrastructure gaps require solar-hybrid mini-grids, satellite internet and smartphone subsidies to broaden connectivity. Adaptive regulation via fintech sandboxes—already active in at least 15 African markets—will allow safe testing of new products, with transparent exit criteria to full licensing.

Immediate actions include issuing provisional crypto guidelines, integrating e-KYC into licensing regimes and convening multi-stakeholder fintech councils for continuous policy refinement. 

Continental institutions should extend the Digital Trade Protocol to cover digital-asset flows, finance blockchain backbone pro­jects and mobilise ethical crypto venture capital through tax incentives and co-investment vehicles.

The writers are Maritime & Port Expert/AI Consultant/Senior Research Fellow CIMAG/CEO Knowledge Web Centre and a Professor of Naturopathy/Barrister & Solicitor (The Gambia Bar)/Chartered health economics/ President, Nyarkotey College of Holistic Medicine & Technology.

E-mails: [email protected] & [email protected]