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Why AI, blockchain is forcing Africa's authorities to reconsider FinTech

Why AI, blockchain is forcing Africa’s authorities to reconsider FinTech

Recent developments in parts of Africa reflect a growing awareness among officials of the likely implications of the blockchain technology and digital currency use, particularly within the banking sector.

Following a response by South Africa's Minister of Finance, Malusi Gigaba, to a question regarding the government's position on cryptocurrencies and regulation in the market, chairperson of South Africa's FF Plus party, adv Anton Alberts said if the technology behind Bitcoin does realise its potential, it will make banks superfluous and may bring governments to a fall.

Alberts stated: "Virtual currency and blockchain technology have the ability to decentralise the financial sector worldwide. It can either drastically change or put an end to banks and other financial institutions as we know them. The implication for governments is even greater, because the technology enables taxpayers to receive their salaries and to trade using currencies that are presently not traceable or detectable in these new virtual economic systems.

"The investigation that the ANC launched into the possible regulation of virtual currency will probably produce nothing more than powerless legislation, because no law will be able to govern the virtual system that is global and anonymous. Therefore, if the technology does realise its potential, it will not only make banks superfluous, but it may also bring governments to a fall."

A similar sentiment that banks are likely to lose out was reportedly shared recently when officials of the Central Bank of Nigeria met with local cryptocurrency stakeholders.

While it has become obvious that more Nigerians now run many transactions using cryptocurrencies, especially Bitcoin, - for its peer-to-peer transaction system - with little or no need for services provided by banks, the meeting could be seen as one of the first of such that is likely to set the pace for more critical crypto-related issues to be discussed in Nigeria.

According to Bitpesa CEO Elizabeth Rosiello, it is another positive step in a long process to make effective change at the legislative level.

"BitPesa has been working very closely with the CBN since we entered the Nigerian market in 2015," said Rosiello. "We strongly believe that it is integral for digital finance companies to work hand-in-hand with regulators to ensure complete compliance of their business models. The CBN has an extremely competent team of experts, advisors and stakeholders that has been meeting on the issue of innovation in the digital finance sector, with the goal of protecting Nigerian citizens and the economy from fraud while furthering innovation, financial growth and investments in the economy."

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