Recent data from UNCTAD suggests that Kenya has the highest percentage of residents who are crypto owners than any other African country. To combat the growing use of cryptocurrencies, UNCTAD says it recommends the imposition of a tax to discourage crypto transactions.
ways to protect household savings”
According todatain the latest (UNCTAD) policy brief, Kenya has 8.5% of its population owning digital currency, the highest in Africa and the fifth highest in the world. Only Ukraine (12.7%), Russia (11.9%), Venezuela (10.3%) and Singapore (9.4%) have a higher percentage of crypto owners than Kenya.
As the data shows, South Africa is the second largest country in Africa and the eighth largest in the world with 7.1% of its population owning or holding cryptocurrency in 2021. In Nigeria, one of the largest cryptocurrency markets globally, about 6.3% of the population owned or held cryptocurrencies; using UNCTAD data, this means that of the country’s populationto 211 million people
Of the 20 countries surveyed, Australia was found to have the smallest percentage of its population (3.4%) that owned cryptocurrency during the relevant period.
On the other hand, UNCTAD, in its report on the survey results, acknowledges that cryptocurrencies are growing in popularity because they are “an attractive channel for money transfer.” The UN agency also said it found that middle-income earners in inflation-hit developing countries own or hold cryptocurrencies because they are seen “as a way to protect household savings.”
Mandatory registration of crypto exchanges
However, based on its findings, UNCTAD stated that it determined that “the use of cryptocurrencies could lead to risks of financial instability.” In addition, its use potentially “opens new channels for illicit financial flows.”
“Finally, if left unchecked, cryptocurrencies could spread as a means of payment and informally replace domestic currencies (a process called encryption), potentially jeopardizing the monetary sovereignty of countries. “UNCTAD stated in its policy brief that “the use of stable coins is a key reserve currency poses the greatest risk in developing countries where demand for a reserve currency is not being met.”
To minimize some of these risks, UNCTAD said it recommends “mandatory registration of crypto exchanges and digital wallets.” It also recommends imposing an “entry fee for crypto exchanges” and taxing cryptocurrency transactions. Doing so would make the use of cryptocurrencies less attractive, UNCTAD said. Other recommendations include restricting advertising of cryptocurrencies and issuing a Central Bank Digital Currency (CBDC).
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