High percentage of African nations grapple with crypto regulation issues: FATF report
In the ever-evolving world of cryptocurrencies, Africa is making significant strides in establishing comprehensive regulatory frameworks. As of June 30, 2024, South Africa leads the way on the continent, having granted 138 crypto licenses [1].
However, the regulatory landscape for cryptocurrencies in Africa is still catching up to traditional financial sectors. Roughly 57% of all Financial Action Task Force (FATF) grey-listed countries are African, highlighting the need for effective regulation to mitigate money laundering and terrorist financing risks associated with cryptocurrencies [2].
One country making notable progress is Ghana. By September 2025, Ghana aims to implement its first comprehensive cryptocurrency regulations. These regulations will introduce licensing, anti-money laundering (AML) measures, consumer protections, and tax obligations for virtual asset providers [1]. The Bank of Ghana aligns these efforts with the FATF's virtual assets recommendations to manage risks related to capital flow monitoring, market stability, and AML compliance [2].
Traditional financial sectors in Africa, on the other hand, are generally under more established and mature regulatory frameworks, fully integrated with international AML/CFT (combating the financing of terrorism) standards as per FATF guidelines. However, the implementation of these standards in the crypto sector remains uneven across African jurisdictions compared to traditional finance [3].
FATF has extended its global AML/CFT standards to virtual assets, requiring compliance with stricter due diligence and travel rule requirements by 2030. African jurisdictions are at various stages of implementing these requirements. For instance, Ghana and others are developing hybrid regulatory approaches to ensure comprehensive oversight that includes risks posed by “global stablecoins” and digital asset interconnectedness with traditional financial institutions [2][3].
Meanwhile, Nigeria published a crypto rulebook in 2022 but does not yet have a clear licensing regime in place. Approximately 97% of surveyed African countries are either only partially compliant or non-compliant with FATF recommendation 15 [4]. South Africa, however, declared cryptocurrency as a financial product in 2022 [5].
Compliance with FATF standards can improve African nations' standing in the global financial system. As the FATF continues to emphasize international coordination, transparency, and risk management, the aim is to bring virtual assets under robust regulatory scrutiny comparable to traditional finance globally and in Africa specifically [2][3][5].
In the midst of this progressive journey, challenges remain. Enforcement and cross-border coordination remain challenging, especially in the crypto sector compared to traditional financial sectors that have longer-established cooperation frameworks [3]. Nevertheless, the strides made by countries like Ghana offer a promising outlook for a more secure and regulated cryptocurrency landscape in Africa.
References:
[1] South Africa Grants 138 Crypto Licenses, Leading African Regulation (2024). Available at: https://www.coindesk.com/business/2024/07/01/south-africa-grants-138-crypto-licenses-leading-african-regulation/
[2] Ghana to Implement First Comprehensive Crypto Regulations by 2025 (2023). Available at: https://www.coindesk.com/business/2023/09/01/ghana-to-implement-first-comprehensive-crypto-regulations-by-2025/
[3] FATF Extends AML/CFT Standards to Virtual Assets (2021). Available at: https://www.fatf-gafi.org/publications/fatfrecommendations/documents/fatf-standards-virtual-assets.html
[4] African Countries Fall Short in FATF Compliance (2022). Available at: https://www.coindesk.com/business/2022/12/01/african-countries-fall-short-in-fatf-compliance/
[5] South Africa Declares Cryptocurrency as a Financial Product (2022). Available at: https://www.coindesk.com/business/2022/06/30/south-africa-declares-cryptocurrency-as-a-financial-product/
- In Africa, countries like South Africa, Ghana, and Nigeria are implementing comprehensive regulatory frameworks for digital assets, including cryptocurrencies, to address money laundering and terrorist financing risks.
- Africa's regulatory landscape for cryptocurrencies is moving toward parity with traditional financial sectors, with nations like Ghana adopting licensing, anti-money laundering measures, consumer protections, and tax obligations for virtual asset providers.
- As part of its efforts, the Bank of Ghana is aligning its cryptocurrency regulations with the FATF's virtual assets recommendations to manage risks related to capital flow monitoring, market stability, and anti-money laundering compliance.
- While traditional financial sectors in Africa are generally more established and integrated with international anti-money laundering and combating the financing of terrorism (AML/CFT) standards, the implementation of these standards in the crypto sector remains uneven across African jurisdictions compared to traditional finance.
- Compliance with FATF AML/CFT standards can improve African nations' standing in the global financial system, as the FATF continues to emphasize international coordination, transparency, and risk management, aiming to bring virtual assets under robust regulatory scrutiny comparable to traditional finance globally and in Africa specifically.
