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As Africa’s Web3 ecosystem gains momentum, it grapples with substantial regulatory challenges that could impede its potential for transformation.
Jathin Jagannath, a developer advocate at Cartesi, a Web3 rollup protocol, has identified regulatory uncertainties as a significant hindrance to Africa’s Web3 advancement.
The lack of clear and well-defined regulations surrounding Web3 technologies breeds uncertainty among potential users and investors, creating a sense of caution.
Jagannath emphasized that this regulatory ambiguity might discourage the full adoption of the groundbreaking opportunities presented by Web3.
“Incorporating regulatory clarity, improving digital literacy, and upgrading infrastructure will empower Africans to overcome these barriers and embrace rapid modernization,” Jagannath stated in a recent interview.
Africa indeed presents a fertile ground for the adoption and innovation of Web3 technologies.
According to a report by PricewaterhouseCoopers and Emurgo Africa, blockchain funding in Africa experienced an astonishing 1,668% surge in 2022.
Leading the way in embracing Web3 are countries like Kenya, Nigeria, and South Africa.
Nonetheless, despite its tremendous potential, Africa grapples with challenges related to education and knowledge accessibility.
Jagannath emphasized the crucial need for enhanced digital literacy. He highlighted that having a skilled workforce and an informed user base is essential for the successful integration of Web3 technologies.
Awosika Israel Ayodeji, the program director of Web3bridge, further emphasized the educational and knowledge access challenges faced by African developers.
Ayodeji pointed out that high poverty rates often compel individuals to prioritize trading over comprehensive learning.
To tackle these issues, Cartesi and Web3bridge have collaboratively launched an eight-week Cartesi masterclass in Nigeria, commencing in early January 2024.
Africa’s Web3 Ecosystem Has Immense Potential
The potential for a Web3 boom in Africa in 2024 and beyond is unquestionable.
Several factors, including the continent’s youthful population and the volatility of its currency, create an ideal environment for the adoption of Web3 technologies, as emphasized by Jagannath.
However, data from the Oxford Business School reveals that nearly 24% of Africans still lack access to the traditional banking system.
Jagannath envisions Web3 as a solution to these challenges. In his view, decentralized wallets and other Web3 applications can effectively address current issues. Furthermore, this technology has the potential to bring about transformative changes in how Africans engage with financial systems and participate in cross-border trade.
CBN Approves Africa Stablecoin Consortium to Pilot cNGN Stablecoin
In recent news, the Central Bank of Nigeria (CBN) has granted approval to the Africa Stablecoin Consortium (ASC) to launch the cNGN stablecoin within its regulatory sandbox.
The official launch of this stablecoin is scheduled for February 27, 2024, as announced by the Africa Stablecoin Consortium, a collaborative initiative involving Nigerian banks and fintech companies.
The consortium has highlighted that the cNGN stablecoin fully adheres to the regulatory guidelines and standards established by the Central Bank of Nigeria, the Nigerian Securities and Exchange Commission (SEC), and the Nigerian Financial Intelligence Unit (NFIU).
Furthermore, the consortium has expressed its strong commitment to maintaining an open dialogue with regulators to ensure compliance, protect consumers, and maintain transparency throughout the duration of the project.
It’s important to note that the cNGN stablecoin is designed to complement, rather than replace, the eNaira, which was introduced by the CBN with broader functionalities.
The Africa Stablecoin Consortium will oversee the operation of the cNGN stablecoin, which is currently compatible with strategic blockchains like Bantu and BNB Smart Chain.
