What has 2019 taught us about cryptocurrencies?

Policing cryptocurrencies has become a game of whack-a-mole for regulators
  • 2019 has been an eventful year for cryptocurrencies.
  • In Africa, cryptocurrencies have reignited the conversation about financial inclusion and bringing the benefits of mainstream financial services to previously unbanked and underbanked people.
  • Marius Reitz, GM for Africa at Luno, writes on issues that have kept cryptocurrencies in the headlines in the last 12 months.

To say 2019 has been an eventful year for cryptocurrencies would be putting it mildly. From new digital currencies and price fluctuations to cryptocurrency bans and the cryptocurrency version of a global trade war. The last 12 months have been notable for a variety of reasons that have kept cryptocurrencies in the headlines.

From an African perspective, cryptocurrencies have reignited the conversation about financial inclusion and bringing the benefits of mainstream financial services to previously unbanked and underbanked people. By challenging individuals and businesses to consider some of the pitfalls of the current financial system, some of these events have strengthened the case for a better deal for Africans from the global financial system.

We have selected some of the most prominent events of the year and explored what they tell us about the need to upgrade the world to a better financial system, especially in the context of Africa’s many challenges.


It’s sometimes hard to believe Libra was announced almost six months ago. Since then, Facebook’s proposed digital currency has been at the centre of more controversy than most technology innovations face in their entire lifetime. First was the discussion about what Libra meant for the future of cryptocurrencies, as well as the future of money. Then came the conversation about whether or not the emerging markets Libra was mainly aimed at were ready for it. And then came the drama with partners dropping out amid pressure from governments across the world.

Despite all the drama, what is undeniable is that the universality of Facebook will be very useful for taking the benefits of financial inclusion to many markets and people that have been excluded from the benefits of mainstream financial services. The question that remains unanswered, however, is whether legislators in emerging markets can move at a fast enough pace to enable the benefits offered by cryptocurrencies like Libra and provide safeguards for their populations and economies.

In the last 12 months, African countries have taken various positions on cryptocurrencies. From Burundi banning all use of cryptocurrencies to the Ugandan finance minister advising citizens to “tread with caution” until the government has established clear regulation. Let’s not forget the Bank of Ghana announcing it will introduce a digital currency in the “near future”. The drama that surrounds cryptocurrencies is seldom better played out anywhere else than on the African continent.


While the jury is still out, many experts have predicted that cryptocurrencies will find a natural home amid a very open and expanding market on the continent. Experts argue that where traditional ways of exchanging value are very expensive, prohibited or subject to fraud, savvy people will embrace the distribution and access that cryptocurrencies provide.

Our recent Future of Money report also revealed that in markets where people are more financially savvy because they have to be - not because it is a “nice to have” - they spend more time understanding money, managing it, preserving it and being creative with how they maximise its use. This means that if cryptocurrency can provide a cheaper and more secure means of exchanging value, better than the existing system, it will be used.

The price of Bitcoin has been on a bit of a roller coaster in 2019. The year started with Bitcoin at $3,800, rising to almost $9,000 in May and then to over $12,000 in August before dropping to $8,000 in September. It rallied back up to $9,500 in October, dipped to below $7,000 in November. The price has been relatively stable in early December, trading between $7,300 and $7,500.

Although there have been many explanations offered for the volatility of the world’s most famous cryptocurrency, it is important to remember that every new asset class such as cryptocurrencies is bound to experience a higher level of fluctuations compared to established assets. However, as the benefits become clearer, more people and businesses will hold the coins for their utility value. This will reduce speculation and volatility.


In June 2019, cyber security firm Kaspersky released the findings of its Cryptocurrency Report 2019, which found that although many consumers wanted to buy and use cryptocurrencies, a knowledge gap is getting in the way of wider adoption. The report found that while 29 percent of people have some knowledge of cryptocurrencies and there is a demand from many to use the technology, just ten percent fully comprehend how they work.

Our Future of Money report also revealed that Africans are more likely to be open to adopting cryptocurrencies than people from other continents. Compared to the United Kingdom (7 percent), over three times as many respondents from Nigeria (23 percent) think a single global currency would make the current financial system better. Where traditional ways of exchanging value are very expensive, prohibited or subject to fraud across Africa, savvy people will love the distribution and access cryptocurrencies provide.

However, a knowledge gap can be easily exploited by cyber criminals who take advantage of loopholes to defraud consumers of their hard earned money. In South Africa alone, 16 percent of consumers said they have been victims of cryptocurrency fraud. This is why more needs to be done to improve consumer education on digital currencies and their potential benefits.


The stark difference in the approaches taken by the United States and the People’s Republic of China to working with cryptocurrencies is another example of ongoing conflict between the world’s biggest economies. While the US government has openly criticised Facebook’s attempt to launch a digital currency, the Chinese government has announced that it is working with tech giants such as Huawei to develop a state-backed digital currency.

From a cryptocurrency perspective, China’s warmth can only be good news for validating the promise that has long been associated with cryptocurrencies. Just as Facebook’s universality is great news for Libra, China’s increased influence on the world stage could also be very useful for taking the benefits of cryptocurrencies into some of the world’s biggest untapped markets.

As we wrap up 2019 and get ready for the new year, it is almost impossible to predict what the future could possibly hold for cryptocurrencies. However, if global market trends and expert opinions are anything to go by, it looks like we are set for the emergence of more tangible use cases, including stablecoins and crypto lending that will accelerate adoption of cryptocurrencies and address volatility.

The only major threat to this would be inadequate access to comprehensive and balanced information about the benefits of cryptocurrencies and how it can help with upgrading the world to a better financial system. If we are able to address this challenge and provide the information people need, we may just be on the verge of a new era that offers a better deal for everyone.


By Marius Reitz, GM for Africa at Luno

PS: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of Business Insider SSA by Pulse.


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