China has become one of the main investors in Africa in the past few years, while the continent has been experiencing significant transformation in the digital space. Coupled with the rise in cryptocurrencies markets, do the different regulatory approaches adopted in China and in certain African countries favour a convergence of interests? We review how China and some African countries have approached crypto regulation and what this means for investors.

The 2019 United Nations Conference on Trade and Development’s World Investment Report indicates that between 2013 and 2017, Chinese direct investments in Africa grew by 65%, placing China among the top five direct investors in Africa after France, the Netherlands, the U.S. and the UK. In the wake of the African digital transformation in financial (especially payment) services and the expanding cryptocurrency markets, does the regulatory framework, or lack thereof favour a convergence of interests between China and the African continent?

China: blanket ban on cryptocurrencies and promotion of blockchain-based innovation

In October 2019, President Xi Jinping gave a speech describing blockchain as an “important breakthrough in independent innovation of core technologies” and calling on the country to become a leader in this technology. Xi Jinping’s endorsement of the technology contributed to a surge of the bitcoin and ethereum value, despite the fact that virtual currency had been prohibited in China since 2017.

Popularity of cryptocurrencies in Africa

The authorities’ position

Some grey areas and open doors to regulations