Bridging the crypto divide(2): A lobal adoption trends and the African lag

By David King BOISON(PhD)& Raphael Nyarkotey OBU(Prof)

Learning from the world – transferable models

The UAE’s strategic free?zone model – The United Arab Emirates has deliberately cultivated specialized free?zone regimes to attract digital?asset firms under clear, proportionate rules.

Abu Dhabi’s ADGM FSRA first introduced its bespoke virtual?asset rulebook in 2018, and by December 2024 had extended its regime to encompass fiat?referenced tokens and stablecoins under a risk?based licensing approach (Abu Dhabi Global Market FSRA, 2025).

Dubai’s VARA, established in 2022, followed with comprehensive Virtual Assets and Related Activities Regulations in early 2023, mandating robust KYC/AML controls, governance standards, and cybersecurity requirements for all VASPs (VARA, 2025).

Coupled with zero personal?income tax on crypto gains and corporate tax incentives for free?zone entities, the UAE’s dual?zone framework—combining ADGM’s established legal infrastructure and VARA’s city?wide mandate—provides a replicable blueprint for jurisdictions seeking to balance innovation incentives with investor protection.

Singapore’s technology?neutral licensing under the PSA – Singapore offers a model of regulatory clarity through its Payment Services Act (PSA). Since 2020, the Monetary Authority of Singapore has licensed digital?payment?token services alongside e?money and remittance providers under a unified framework.

Amendments effective April 2024 require any entity dealing in digital?payment tokens—whether exchanges, wallet providers, or merchant aggregators—to obtain a Major Payment Institution licence or notify MAS and secure authorisation within six months (Monetary Authority of Singapore, 2024).

MAS complements its licensing regime with detailed consumer?protection guidelines, mandating clear disclosures, dispute?resolution mechanisms, and FATF?aligned AML/CFT safeguards. This comprehensive, technology?neutral approach has positioned Singapore as a leading regulated crypto hub, hosting major global players while maintaining high standards of financial integrity (MAS, 2024).

The EU’s MiCA passporting regime – The European Union’s Markets in Crypto?Assets Regulation (MiCA) establishes a single, pan?EU rulebook for stablecoins and crypto?asset services, with a two?phase rollout—asset?referenced and e?money tokens in June 2024, followed by broader service?provider rules in December 2024 (European Securities and Markets Authority, 2024).

MiCA grants a “passport” allowing any authorised provider in one Member State to operate across all 27 jurisdictions, subject to harmonised transparency, prudential, and market?integrity requirements. By eliminating national fragmentation and providing legal certainty, MiCA has already drawn token issuers to jurisdictions like Luxembourg and Ireland, illustrating the power of coordinated, EU?wide frameworks to foster both consumer protection and market development.

Brazil’s public?private CBDC collaboration – Brazil’s Banco Central do Brasil has pursued a pragmatic, pilot?driven approach to its Digital Brazilian Real (Drex). After publishing initial CBDC guidelines in May 2021, the Central Bank launched a second?phase Drex pilot in late 2024, partnering with Banco Inter, Chainlink, and Microsoft Brazil to test tokenized trade?finance applications for agricultural commodities (FinTech Futures, 2024).

By engaging private?sector consortia in real?world use cases—ranging from on?chain letter?of?credit models to programmable settlement—Brazil demonstrates how hybrid public?private CBDC experimentation can drive practical innovation within a sovereign monetary framework, offering lessons for other economies seeking to blend central?bank digital money with private?sector capabilities.

Crypto?tax clarity in Estonia and Switzerland – Estonia’s tax regime treats cryptocurrency transactions as property transfers, subject to a flat 20 percent income?tax rate without special VAT levies, and requires all crypto gains—trading, mining, staking—to be declared as business or capital?gains income under existing tax laws (Global Legal Insights, 2025).

This clear, principle?based approach, coupled with e?Residency and digital?ID programmes, positions Estonia as a low?friction jurisdiction for blockchain businesses. In Switzerland, FINMA’s July 2024 Guidance 06/2024 on stablecoins codified minimum requirements for bank default guarantees, KYC/AML processes, and governance controls, updating its 2019 ICO guidelines and clarifying when stablecoin issuers must obtain banking or financial?intermediary licenses (FINMA, 2024).

These clarity?of?rules models underscore the importance of well?defined tax and supervisory frameworks to foster legal certainty, encourage compliance, and attract reputable market participants.

Closing Africa’s crypto gap – a multi?pillar strategy

Legislative reforms – To create a clear, enabling legal environment for digital?asset markets, African lawmakers should adopt a model crypto?asset bill at the AU or ECOWAS level that defines token categories, licensable activities, and enforceable smart?contract provisions. This framework must embed risk?based AML/CFT measures—aligned with FATF Recommendation 15—and comprehensive consumer?protection safeguards, including standardized disclosure requirements and dispute?resolution mechanisms (International Monetary Fund, 2023).

By harmonizing legislative language across member states, policymakers can ensure that the same activity carries the same regulatory obligations continent?wide, reducing legal arbitrage and expediting market entry for new service providers. Embedding smart?contract enforceability within commercial codes will also legitimize on?chain transactions and give courts the authority to interpret and enforce digital agreements, thereby bolstering investor confidence.

Regulatory harmonization – Africa’s fragmented licensing landscape can be transcended through a Pan?African Crypto Passport, modeled on the EU’s MiCA, in which a single authorisation from one jurisdiction grants cross?border service rights in all subscribing states (European Securities and Markets Authority, 2024).

Regional blocs—ECOWAS, EAC, SADC—should establish mutual?recognition agreements for Virtual Asset Service Provider licences, supported by joint supervisory colleges and shared AML/CFT intelligence platforms to coordinate oversight (Cambridge Centre for Alternative Finance, 2024).

Expanding regulatory sandboxes across these blocs will enable innovators to pilot solutions under standardized conditions, with clear exit pathways to full licensing. Such harmonized regimes reduce compliance costs, foster pan?African liquidity pools, and attract institutional participants by offering legal certainty and economies of scale.

Digital infrastructure investment – Robust digital?asset ecosystems require ubiquitous connectivity, reliable power, and trusted digital?ID systems. Governments should prioritize broadband expansion—where fixed?broadband penetration stood at a mere 12 percent in 2023—and promote affordable mobile?internet services, addressing the 60 percent usage gap in Sub?Saharan Africa (Omdia, 2023; GSMA Intelligence, 2024).

Parallel investments in national digital?ID platforms—already operational in 22 countries—will underpin secure e?KYC processes for crypto?account opening (World Bank ID4D, 2024).

To power point?of?service infrastructure and blockchain nodes in underserved areas, public?private partnerships can deploy solar?hybrid mini?grids and satellite?based internet solutions, ensuring that digital?asset services reach rural as well as urban communities. Establishing interoperable “crypto rails” atop existing payment?settlement systems like PAPSS will then enable token transfers and stablecoin settlements to flow seamlessly across borders.

Capacity building – Bridging the skills gap among regulators, legal professionals, and financial?sector practitioners is essential for effective supervision and market development. Pan?African institutions should sponsor blockchain?policy fellowships and establish certified training programmes—such as the Africa Blockchain Institute’s standardized curriculum and university partnerships at institutions like the University of Johannesburg and Covenant University (Africa Blockchain Institute, 2024; Web3Africa.news, 2023).

Vocational and continuing?education programmes must integrate Web3 modules on smart?contract auditing, token?economics, and blockchain governance. At the institutional level, central banks and securities regulators should form dedicated crypto?asset desks, staffed with analysts trained in on?chain forensics and fintech risk management.

Finally, multi?stakeholder “crypto councils” at national and regional levels can facilitate ongoing knowledge exchange, joint research, and policy workshops to keep regulatory frameworks agile and responsive to emerging technologies.

Strategic policy recommendations

For Governments – Enact clear, future?proof crypto laws – National legislatures must move beyond fragmented guidelines to adopt comprehensive crypto?asset statutes that define token categories, licensable activities, and enforcement mechanisms. Model bills at the AU or ECOWAS level should specify payment tokens versus security tokens, embed smart?contract enforceability, and mandate standardized disclosures and dispute?resolution procedures.

Critically, these laws must integrate risk?based AML/CFT requirements aligned with FATF Recommendation 15—including enhanced due?diligence thresholds and joint supervisory protocols—to ensure that crypto markets operate within international anti?illicit?finance standards (International Monetary Fund, 2023).

Simultaneously, tax authorities should issue clear guidance on crypto gains—treating tokens as property transfers or business income under existing tax codes—to eliminate uncertainty, encourage compliance, and capture revenue that can be reinvested into digital?infrastructure projects.

For Central Banks – Embrace hybrid CBDCs and risk?based crypto supervision – Central banks should adopt a dual approach: advance CBDC pilots to modernize sovereign payment systems while supervising private crypto platforms on a risk?proportionate basis. Retail and wholesale CBDC frameworks—such as Nigeria’s eNaira and Brazil’s Drex experiments—demonstrate how central?bank?issued digital money can coexist with licensed stablecoins to enhance inclusion and resilience (BIS, 2024).

At the same time, regulators must build dedicated crypto?asset desks staffed by fintech?savvy analysts and deploy blockchain?analytics tools for real?time transaction monitoring. By applying a tiered licensing regime—granting smaller players streamlined approvals under strict consumer?protection safeguards, while subjecting larger exchanges and custodians to full prudential oversight—central banks can balance innovation with financial stability and security.

For the private sector: Co?develop payment solutions and tokenized markets —Financial?services firms, telecom operators, and fintech startups must partner with regulators to design interoperable payment rails and DeFi platforms that meet both market needs and supervisory requirements. Collaborative sandboxes—like those run by Ghana’s BoG and South Africa’s FSCA—have proven effective at iterating new products under controlled conditions (Cambridge Centre for Alternative Finance, 2024).

Private?sector consortia should now scale pilot successes—such as blockchain?enabled remittance corridors and tokenized supply?chain finance—into fully licensed services, embedding regulatory compliance modules and user?education tools from day one. By co?investing in shared infrastructure libraries (smart?contract templates, digital?ID APIs), industry can reduce development costs, accelerate time?to?market, and ensure that emerging tokenized markets reflect local needs and empower end?users.

For regional blocs: Coordinate policy harmonization and infrastructure investment –  ECOWAS, EAC, and SADC should formalize mutual?recognition agreements for Virtual Asset Service Provider licences, creating a Pan?African Crypto Passport that mirrors the EU’s MiCA “passporting” mechanism (European Securities and Markets Authority, 2024).

Joint supervisory colleges can facilitate cross?border inspections and intelligence?sharing, while regional development banks—such as the African Development Bank—can underwrite backbone projects like blockchain?enabled settlement rails and national digital?ID platforms.

Complementing these efforts, the AfCFTA Digital Trade Protocol offers an immediate framework for e?payment interoperability and data protection standards that can be extended to regulated crypto?asset flows (AfCFTA Secretariat, 2024). By pooling resources and aligning policy, regional blocs can deliver the legal and technical infrastructure to bridge Africa’s crypto divide and position the continent as a cohesive, competitive digital?finance zone.

Conclusion

The past half?decade has witnessed an extraordinary expansion of the global crypto economy: trillions in market capitalization, hundreds of millions of users, and pioneering regulatory frameworks from Dubai to Brussels (BIS, 2024; Chainalysis, 2024).

Yet Africa remains at the margins of this transformation, its grassroots enthusiasm constrained by fragmented laws, patchy infrastructure, and capacity gaps (Fuje, Quayyum, & Molosiwa, 2022). As a result, the continent risks ceding financial?inclusion gains, youth?driven innovation, and critical fee revenues to external platforms—while its most talented developers seek opportunities abroad.

Bridging this divide demands more than piecemeal reforms. It requires a unified, multi?pillar strategy that enshrines clear crypto?asset legislation—aligned with AU or ECOWAS model bills—harmonizes licensing across regional blocs via a pan?African passport, invests in digital and energy infrastructure, and builds human?capital through targeted education and regulatory training.

By adopting risk?based AML/CFT standards under FATF Recommendation 15 and embedding smart?contract enforceability within commercial codes, African policymakers can transform informal activity into secure, transparent markets that fuel entrepreneurship rather than frustrate it.

Equally, continental coordination through the AfCFTA Digital Trade Protocol and development?bank financing for national digital?ID and payment?settlement platforms will lay the technical foundations for interoperable “crypto rails.” When combined with collaborative sandboxes and public–private “crypto councils,” these measures can ensure that regulation evolves in step with innovation—preventing both regulatory arbitrage and digital marginalization.

Africa now stands at a crossroads: it can either harness blockchain and digital assets to accelerate financial inclusion, empower its youth, and integrate more deeply into the global digital?finance ecosystem—or remain sidelined as its neighbors seize the opportunities of the crypto renaissance.

The evidence is clear, and the tools are at hand. It is time for governments, central banks, regional bodies, private sector actors, and the next generation of African entrepreneurs to unite behind a shared vision of digital convergence—bridging the crypto divide and unlocking a new era of prosperity for the continent.

>>>Dr David King Boison is a Maritime & Port Expert | AI Consultant | Senior Research Fellow CIMAG| CEO Knowledge Web Center. He can be reached via [email protected]

>>>Prof. Raphael Nyarkotey Obu is a Professor of Naturopathy | Barrister & Solicitor (The Gambia Bar)| Chartered Health Economist| President, Nyarkotey College of Holistic Medicine & Technology. He can be reached via [email protected]

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