Africa Crypto Week in Review: Crypto Tax Compliance Mandatory In South Africa, Stablecoin Uptake Rises in Kenya As Ethiopia Cements Lead As Mining Hub

Jump into the latest Africa Crypto Week in Review and Discover how stablecoins are the new trend in the crypto Africa market. Also, uncover the SARS crypto tax clampdown on early investors and Ethiopia’s Bitcoin mining push to steal Nigeria’s crown!

Another week of rapid crypto developments on the African continent ends. Let’s take a journey through the week’s highlights to round it up: 

South Africa’s Mandates Disclosure Of Crypto For Tax Purposes

According to Sars Commissioner there are currently 150 registered Crypto service providers and 5 Crypto Exchanges in South Africa🏌‍♂️🏌‍♂️🚀🚀 im proud of our government on this one…If we going to continue being one of Africa's biggest economies we have to be ahead of time

— Lord Satoshi (@cogchain) October 11, 2024

South Africa’s Revenue Service (SARS) has announced that crypto will be part of its compliance programs. This directive means that crypto holders can no longer hold these assets without reporting them to tax authorities. The order applies, especially for individuals holding them overseas.

The African economic powerhouse boasts one of the highest uptakes of crypto, with an estimated 10% of the population already active. SARS is keen to ensure taxpayers disclose crypto assets in their tax returns, particularly profits from trading coins and tokens. 

Crypto taxation is a tricky topic because the asset is outside the financial mainstream and does not require banks and traditional institutions to support it. Therefore, SARS will likely target service providers like exchanges more in its compliance drive. 

Stablecoin Uptake Soars In Kenya And Africa

The rapid rise in stablecoin usage over the past five years indicates the rapid development in crypto trading sophistication. These assets’ values peg to stable currencies such as the US dollar and are instrumental in mitigating trading volatility. 

Stablecoin usage  has surged in Kenya because of the integration of the popular mobile payment service Mpesa with exchange services such as Binance and Paxful. The Kenyan shilling experienced disruption in exchange rates, and stablecoins provided alternative digital banking options for users seeking to preserve value. 

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Ethiopia To Surpass Nigeria As A Mining Hub? 

Ethiopia is fast-rising and could surpass Nigeria as a crypto mining hub in Africa. 

Nigeria struggles with energy challenges, restricting it from becoming a crypto hub despite its standing as an economic giant in Africa.

Due to the relatively low electricity costs and abundant renewable energy from its hydro sources, Ethiopia is attracting global miners, mainly those from China. Most miners operating from Ethiopia use the more efficient gear like Bitmain S19J Pro. 

Presently, local operations consume around 600 MW of power. However, Ethiopia plans to expand its capacity in the coming years, adding an extra 1.7 GW. 

At the same time, East Africa is boosting digital infrastructure and extending partnerships with foreign crypto firms.  Early this year, the government signed a $250 million deal with West Data Group, a firm from Hong Kong, to make the country more attractive for crypto miners.

EXPLORE: Africa Crypto Week in Review: Stablecoins Flourishing, Nigeria’s Crypto Adoption Soaring As Bitget Opens Kenya Office

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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.