Crypto license in Africa

The cryptocurrency market in Africa is becoming increasingly regulated. Despite variations in approaches to recognizing cryptocurrencies and blockchain technologies, the African region is considered promising for launching projects.

Cryptocurrency Regulation in Africa

Among the African population, there is a high level of acceptance of cryptocurrencies, with Bitcoin and stablecoins being used as an alternative method of savings. Disputes over the legalization and digital currency authorization in Africa persist, leading to diverse legal frameworks in different countries. Cryptocurrencies are not officially regulated in Cameroon. In Ghana, cryptocurrencies are not prohibited but are not officially regulated. In South Africa, cryptocurrency service providers must obtain licenses as financial service providers. In Kenya, where one of the continent’s largest crypto markets is located, a bill on virtual asset service providers is in preparation.

Nigeria

Nigeria is considered the largest cryptocurrency economy in Africa. In late 2023, the Central Bank of Nigeria lifted the ban on cryptocurrency transactions, allowing crypto companies to open bank accounts. The Securities and Exchange Commission (SEC) issues licenses to virtual asset service providers (VASPs). Licensees must pay a registration fee in advance. Banks are still prohibited from conducting any cryptocurrency operations, including trading or storage. In May 2023, the Nigerian government approved a national blockchain policy to stimulate economic growth, improve government services, and reduce corruption. It is one of the first documents among various regulations and Africa Blockchain Laws.

South Africa

Cryptocurrency is legalized for use in South Africa. Crypto-assets are officially considered financial products. According to the latest data, 10% of the population is engaged in cryptocurrency activities. In 2023, the financial regulator, the Financial Sector Conduct Authority (FSCA), mandated that operational crypto platforms undergo a licensing procedure. South Africa became the first African country where crypto service providers are required to obtain a Financial Services Provider (FSP) license for official and transparent operations. Existing and new crypto companies operating without a license and failing to comply with the regulator’s standards will face fines or may be shut down. Users can file complaints against unlicensed entities, highlighting the regulator’s emphasis on consumer protection, given the prevalence of cryptocurrency scams in the country and the continent as a whole. Blockchain Licensing in Africa becomes feasible due to the regulatory framework and the integration of blockchain technology, primarily in the banking sectors of different countries, including South Africa.

Mauritius

Mauritius boasts one of the best Africa Crypto Regulations, attracting investors. In 2021, the Virtual Assets and Services Act was enacted, allowing providers of virtual asset services (VASP) to convert virtual assets to fiat currency and vice versa, transfer digital assets, and offer financial services related to issuer offerings or the sale of digital assets.

Projects Suitable for Crypto License in Africa

Companies planning to operate in the African market and launch cryptocurrency exchanges there will require this type of license. For information on Crypto Trading Regulations in Africa, consult SBSB experts. With extensive experience in successful cryptocurrency project launches worldwide, our specialists will provide guidance on all relevant matters and assist in choosing the optimal jurisdiction for your project based on its business model and your preferences.

Licensing Procedure for Crypto Projects in Africa

As the cryptocurrency legal framework in Africa varies, and many countries are on the path to regulating cryptocurrency, the requirements for issuing licenses for official activities differ.

In Nigeria, a licensee must register with the local Securities and Exchange Commission and provide evidence of a minimum paid-up capital, as well as correctly prepared policies and documents.

In Mauritius, a company must submit an application to the Financial Services Commission (FSC) to obtain a crypto license of the corresponding class:

• Class M: broker-dealer of virtual assets;
• Class O: virtual asset wallet services;
• Class R: custodian of virtual assets;
• Class I: advisory services on virtual assets;
• Class S: trading platforms (virtual asset stock exchanges).

To obtain permission, having a headquarters in Mauritius is mandatory.

Before obtaining a crypto license in South Africa, crypto service providers must register with the Financial Intelligence Centre (FIC). The regulator strictly monitors compliance with anti-money laundering and counter-terrorism financing rules (AML and CTF). SBSB specialists recommend implementing African cryptocurrency compliance procedures to meet the regulatory requirements. Developing AML policies and KYC processes helps market participants minimize the risks associated with potential money laundering obtained through criminal means and enhances customer trust.

Cost of Obtaining Digital Asset License in Africa

The prices for obtaining a license for digital assets and the legal operation of a crypto company can vary significantly depending on the project’s business model and the conditions set by regulatory bodies. Additionally, as the cryptocurrency market is still evolving, project launches need to consider changes in legislative norms and requirements. Legal service fees are also included in the cost of obtaining a license. Each project is discussed individually.

For more detailed information on license costs, the application process, and licensee requirements in South Africa, contact our specialists. They will provide comprehensive consultations on all relevant matters!

Why You Should Turn to SBSB Fintech Lawyers for African Digital Currency License

Our team of lawyers has been operating in the international market since 2013, providing corporate services to cryptocurrency projects. If you plan to do business in Africa, reach out to our experts! We will prepare the necessary documents and regulator applications for you, help choose the organizational and legal form of the company. SBSB specialists provide comprehensive legal support for the project “turnkey” at all stages.

Contact our specialists through your preferred method, and they will provide qualified consultations on all matters!