12 °c
London
Monday, March 27, 2023
No Result
View All Result
FurtherAfrica
  • Countries
    • Angola
    • Botswana
    • Cape Verde
    • DRC
    • Eswatini
    • Ethiopia
    • Kenya
    • Malawi
    • Mauritius
    • Mozambique
    • Namibia
    • Nigeria
    • Rwanda
    • South Africa
    • Tanzania
    • Uganda
    • Zambia
    • Zimbabwe
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About
FurtherAfrica
  • Countries
    • Angola
    • Botswana
    • Cape Verde
    • DRC
    • Eswatini
    • Ethiopia
    • Kenya
    • Malawi
    • Mauritius
    • Mozambique
    • Namibia
    • Nigeria
    • Rwanda
    • South Africa
    • Tanzania
    • Uganda
    • Zambia
    • Zimbabwe
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About
No Result
View All Result
FurtherAfrica
No Result
View All Result
Home Fintech

Mauritius enforces crypto licensing in a bid to promote adoption

Web3Africa by Web3Africa
March 17, 2023
in Africa, Fintech, Mauritius
Reading Time: 7 mins read
821 17
0
Share via QRWhatsappShare on FacebookShare on TwitterLinkedInPinteresteMail

Mauritius has a well establish digital asset regulation that serves as an example for all of Africa

  • On the global crypto list of 157 countries, Mauritius ranks 131st with 23,208 crypto owners as of 2022.
  • In 2021, Mauritius released its first crypto liscensing document in Africa, Virtual Asset and Initial Token Offering Services Act.
  • Within its ecosystem, Pursa is the most trusted exchange within Mauritius, having almost 40% of its total crypto traders transact daily.

Also read: AfDB approves US$40M trade finance package to Bank One Mauritius

One of the factors that consistently plague the progress of Africa’s digital asset market is the lack of proper laws. Over the past decade, most African countries have struggled with adopting cryptocurrency and digital assets into their economy. Fortunately, over the years, a few countries like South Africa have embraced the advantages of crypto. However, another African country sets an example to rest by enforcing various crypto licenses in Africa. Despite the lack of fame, Mauritius’ crypto ecosystem is a prime example of a country trying to enforce digital asset regulations and crypto laws benefitting the economy and its people.

Here is a look at how Mauritius, despite its constant battle enforcing digital currency, shows the world how to properly enforce crypto regulations, to protect itself and its people.

Mauritius’ crypto ecosystem

The journey of establishing Africa’s digital asset market to what it is today required some degree of effort. Many governments within the continent saw this only as a threat to its native fiat currency. Countries such as Kenya, Uganda and even Nigeria initially banned the commercial use of cryptocurrency. Other crypto traders in countries such as Tunisia suffered the most. Its government branded those not adhering to the law as criminals conducting money-laundering activities.

Despite this harsh take on the initial concept of Africa’s digital asset market, many individuals crypto traders consistently strived to achieve financial freedom through digital assets. Soon what started appearing as a waste of time, became a trillion-dollar venture. According to CoinGeko, the total market value of all crypto assets surpassed $1.14 trillion as of September 2021.

Also read: Mauritius – the perfect jurisdiction to expand a business across Africa

Total Crypto traders in Mauritius

As expected, this value shifted the minds of many governments, and Mauritius was no exception. On the global crypto list of 157 countries, Mauritius ranks 131st with 23,208 crypto owners as of 2022. In terms of African countries, it ranks 30. Unfortunately, this represents a significantly low number compared to their population of 1.266 million as of 2021.

Despite this, Mauritius’ crypto ecosystem is among the few that were able to garner its government’s attention. Within its ecosystem, Pursa is the most trusted exchange within Mauritius, having almost 40% of its total crypto traders transact daily. Although initial protest from its government, its steady increase in crypto transactions is the main driving force behind its government’s change of heart.

Furthermore, Mauritius’s crypto ecosystem is among the few with crypto licenses in Africa. Its government still does not view Africa’s digital asset market as w a potential gain for its economy and thus does not acknowledge crypto as a legal tender. Fortunately, to safeguard its citizens, Mauritius has established several digital asset regulations that have stabilized its crypto ecosystem.

Licencing in Mauritius’ crypto ecosystem.

Africa’s digital asset market has paved the way for its fintech industry. In addition, Mauritius’ government is openly interested in making its country the leading fintech hub for Africa. To achieve this feat, the Bank of Mauritius had to tread carefully with cryptocurrency. Initially, in December 2013, it issued a warning on digital asses advising members of the public to exercise utmost care and diligence when handling digital currency.

Bank of Mauritius Assigned all rights in developing valid crypto licenses in Africa to the FSC to maintain Mauritius’ crypto ecosystem.

Also read: Downstream infrastructure a priority for Africa energy transition

Its attempt at cautioning its citizens rather than banning its use is reflected significantly in its government’s openness to digital currency.
As a result of its openness to the notion, the government tasked the Financial Service Commission, its integrated regulator for the non-bank financial services sector and global business, with developing guidelines and potential digital asset regulations. This initiative would eventually lead to one of the first crypto licenses in Africa.

First Attempt at a crypto license

At its first attempt in 2019, the FSC established the Finacial Services (Custodian services (digital asset)) to regulate the general safekeeping of digital assets. These “crypto laws” highlighted the potential dangers of cyber hacking that could lead to the loss of its citizens’ assets. Unfortunately, this was a crude attempt at establishing digital asset regulations, and many sought clarification.

To address the misunderstanding, the FSC issued guidance notes on Security token offerings later on in the same year. For those unfamiliar with the term STOs are essentially a synonym for digital assets and involve crypto assets. It is a digital token supported by a blockchain system that represents a stake in an asset. In layman’s language, they are an attempt at a basic form of crypto assets that adhere to governmental regulations.

As Africa’s digital asset market grew, so did the development of other types of virtual assets. To ensure their digital asset regulations were on par, the FSC released a third guidance note to provide a common set of standards for STOs. Thus, finally establishing the first iteration of crypto licenses in Africa.

Establishment of the VA Act

As Mauritius’ crypto ecosystem steadily expanded, so did the sophistication of its digital asset regulations. In 2021, Mauritius released its first crypto liscensing document in Africa, Virtual Asset and Initial Token Offering Services Act. The VA act revolutionized crypto laws in Mauritius, establishing a more sophisticated, fair and secure regulatory system to deal with Africa’s digital asset market.

Also read: Microsoft partners with OCP to boost Africa’s Agritech Industry

The primary purpose of the VA Act was to provide a legislative framework for digital asset regulation. It addressed the intricate matter involving business activities with virtual assets and initial token offerings. Mauritius’ crypto ecosystem finally had crypto laws that met the international standards of the Financial Action Task Force concerning managing, mitigating and preventing any anti-money laundering risk involved with digital currency.

As one of the first crypto licenses in Africa, it established several safeguards that would keep up with the pace of Africa’s ever-evolving digital asset market.

How does Mauritius’ crypto license work in Africa

According to its documentation, Maurtius’ latest VA Act defined various terminologies within the global ecosystem. In doing so, it sets a fine line between fraudulent and legal activities. According to the crypto laws in Africa, a virtual asset service provider(VASP) is a person, who, as a business, conducts one or more activities involving the Mauritius Crypto ecosystem. The activities involved include;

  • The conversion of virtual assets to fit currency and vice versa.
  • The conversion of one or more forms of virtual assets.
  • The facilitation of digital asset transfer.
  • Safeguarding and the administration of virtual assets or instruments that enable the control of any digital asset.
  • The participation in and provision of financial services related to an issuer’s offer or the sale of a digital asset.

In addition, the act also stipulates that a single body would regulate the implementation of any crypto laws, the FSC.

Also read: TLG Capital launches ₦2.25B collateralized credit facility for OnePipe

Criteria for license

Before diving into Africa’s digital asset market, Mauritius had to establish set digital asset regulations and crypto laws to prevent any form of illegal activity.

The VA act also defines the necessary steps for acquiring crypto licences in Africa. The criteria for any VASP to attain the license include:

  • To apply for a crypto license, the party must address the FSC. However, if a bank decides to offer virtual currencies, it must obtain written approval from the Bank of Mauritius and select the type of crypto license it requires.
  • Any VASPA that conducts any activity mentioned in the activities mentioned above must first apply for its corresponding class of crypto licensing.
  • No VASP is allowed to operate on a virtual platform only. All VASPs must have a physical headquarters in Mauritius to monitor all their activities.
  • Any foreign exchange such as Binance or Coinbase dealing with Mauitius’ crypto ecosystem must incorporate a native company.
  • Only the FSC can approve an application for a variation of the crypto license or remove a specific limitation imposed on a specific class.
  • The FSC must approve all controllers, beneficial owners, and associations.

Also read: Young Africans urged to venture into agriculture to improve food security

Each digital asset regulation in Mauritius represents a general mitigation strategy which prevents individual organizations from running off with the citizens’ assets.

Unfortunately, with the infancy of Africa’s digital asset market, organizations will evolve and offer new digital tokens. To address all future complications within Mauritus’ crypto ecosystem, the government introduces five classes of crypto licenses in Africa. They include:

  • Class M: Virtual Asset Broker-Dealer
  • Class O: Virtual Asset Wallet Services
  • Class R: Virtual Asset Custodian
  • Class I: Virtual Asset Advisory Services
  • Class S: Virtual Asset Market Place

Wrapping up

To establish several crypto licenses in Africa, Mauritius’s crypto ecosystem had to devise several safeguards preventing criminal activities. In doing so, many crypto companies have avoided working with its ecosystem. This has raised several questions regarding their systems.

Also read: Blockchain technology curbing the the faulty tax system of Africa

Despite this, Africa’s digital asset Market is steadily growing, and its crypto adoption within the country. Essentially, the establishment of its digital asset regulation framework might be the cause of its slow adoption rate. However, it shows that maintaining citizens’ safety is a country’s top priority. In addition, other governments might learn a thing or two from its exploits in establishing one of the first crypto licenses in Africa.

Related

Source: Web3Africa
Tags: africaBlockchainCoinGekocrypto licensecrypto regulationscrypto tradersdigital assetdigital currencydigital tokensfintechMauritiusMauritius enforces crypto licensing in a bid to promote adoptionMauritius’ crypto ecosystemмаврикийموريشيوسモーリシャス毛里求斯
ScanSendShare335Tweet210Share59Pin75Send
Web3Africa

Web3Africa

We believe that the most important thing in the Blockchain revolution is the ability of people to understand and embrace the change. Our journalism standards – impartiality, truthfulness, transparency, and accuracy – will help you navigate this extremely dynamic world.

Related Posts

Diplomacy

Thailand strengthens ties with Ethiopia

by Rafael Carvalho
March 27, 2023
Fintech

Nigeria digital currency transactions jump 63%

by FurtherAfrica
March 26, 2023
Economy

Fitch upgrades Ghana’s long-term local-currency issuer to ‘CCC’

by FurtherAfrica
March 26, 2023
Business

UK Baron & Cabot launches a portal to support the expansion of local real estate agencies in Africa

by Emmanuel Chilamphuma
March 26, 2023
Travel

Radisson continues to break hotel-opening records in Africa

by Rafael Carvalho
March 26, 2023
Platform Africa 2023
 
Mozambique eVisa
 
MozParks
 

Translate this page

Read the Latest

Diplomacy

Thailand strengthens ties with Ethiopia

by Rafael Carvalho
March 27, 2023
0

The Embassy provided basic medicines and necessities and ensured the Embassy's role to protect all Thai nationals in Ethiopia On...

Read more

Nigeria digital currency transactions jump 63%

March 26, 2023

Fitch upgrades Ghana’s long-term local-currency issuer to ‘CCC’

March 26, 2023

UK Baron & Cabot launches a portal to support the expansion of local real estate agencies in Africa

March 26, 2023

Radisson continues to break hotel-opening records in Africa

March 26, 2023

FurtherAfrica Partners Network

The Exchange Club of Mozambique Taarifa Rwanda
TechGist Africa Africa Oil & Power Farmers Review Africa
Tanzania Invest Zambia Invest See Africa Today
Africa Global Funds Novafrica CrudeMix Africa
Harambee Africa Botswana unplugged Financial Insights Zambia
O Económico Digilogic Africa Web3Africa

Subscribe to FurtherAfrica

Enter your email address to receive new articles on your email.

Join 100,044 other subscribers.
FurtherAfrica

© 2021 FurtherMarkets

FurtherAfrica is a FurtherMarkets Limited platform

  • Countries
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About

Follow Us

No Result
View All Result
  • Countries
    • Angola
    • Botswana
    • Cape Verde
    • DRC
    • Eswatini
    • Ethiopia
    • Kenya
    • Malawi
    • Mauritius
    • Mozambique
    • Namibia
    • Nigeria
    • Rwanda
    • South Africa
    • Tanzania
    • Uganda
    • Zambia
    • Zimbabwe
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About

© 2021 FurtherMarkets

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?