Africa's Ultra-Conservative Approach to Innovation Has Stifled Its Residents and Stifled Talent

Much has been said about the stance of many African countries on digital assets and how this impedes ordinary people from accessing financial services.

Many African countries have adopted an ultra-conservative approach when dealing with revolutionary innovations. However, this has largely left residents behind and stifled talent. As a result, many countries are no closer to attaining ambitious goals. Fear of the unknown has prevented leaders from embracing seemingly risky but innovative solutions. For Africa to truly thrive, there must be a fundamental change in leaders’ mindsets.

Africa’s Ultra-Conservative Approach

Much has been said about the stance of many African countries on digital assets and how this impedes ordinary people from accessing financial services. Crypto proponents lament the ultra-conservative approach that many countries take when dealing with cryptocurrencies or crypto entities, which contributes to Africa’s persistent financial exclusion gap.

Some also argue that the high cost of remitting funds to many African countries results from regulators and governments failing to create an environment conducive to innovative solutions. Despite years of advocacy by blockchain and crypto proponents on the continent, convincing regulators and governments to change their approach has proven challenging.

Therefore, it’s worth examining why African countries often follow a familiar playbook when it comes to crypto. In fact, it is pertinent to understand why many governments in Africa seem to adopt the same strategies—pretend, resist, and ban—each they are confronted with new solutions to old problems.

Pretend, Resist and Ban

Generally, it is mostly accurate to conclude that most personnel at regulating bodies worldwide are trained to supervise or oversee established industries and mature markets. However, in our fast-moving world, new products and solutions emerge constantly. Many of these new solutions fail to endure, which is why regulators often pay little attention to the activities or persons behind such solutions.

In other words, it’s easy for regulators to pretend that nothing significant has occurred due to the abundance of failing projects, making it challenging to keep up. Nevertheless, some of these solutions occasionally evolve into multi-billion dollar industries. When an innovative solution grows into a billion-dollar industry, it signifies that millions of people have embraced it.

Herein lies a problem: regulators, whose staff is primarily trained to oversee traditional industries, often lack the know-how to handle emerging sectors. At this juncture, merely pretending that an innovative solution does not work or hoping it will fade away naturally will not suffice. Therefore, the next logical step will be to resist the innovation. In many African countries, resistance to new innovative solutions for old problems takes the form of public warnings, ridicule, or well-funded campaigns discouraging adoption.

Unfortunately, once the critical mass necessary for a solution to go mainstream is achieved, more entrepreneurs and traditional businesses enticed by the prospect of a new revenue stream want to participate. This embrace of innovation by regular companies and ordinary people can unsettle ill-prepared regulators and governments. Lacking a deep understanding of the solution or industry, their natural response— which may seem the only option—is to ban the innovation outright.

Blocked Solutions Leave Africans Behind

To be sure, many regulators, including those in some of the most innovative countries, largely follow the above script. However, perhaps due to their cultures or democratic systems, these regulators rarely go as far as banning useful innovations. If they do impose a ban, it tends to be short-lived. It’s plausible that many of these countries recognize the irrationality of prohibiting something that millions of people use, especially when the solution addresses an age-old problem.

In Africa, however, the prevailing mindset appears to differ. Innovative solutions that deviate from traditional norms, regardless of their positive impact on lives, often face curtailment or outright bans. This trend has been evident in the case of cryptocurrencies over the past few years, but it did not originate with crypto and will certainly end with crypto.

As reported by Bitcoin.com News and other crypto news outlets for nearly a decade, many African regulators and governments have either banned digital assets or imposed restrictive conditions on the industry. Unfortunately, their actions disregard the fact that crypto-based solutions offer a viable path toward achieving certain ambitious goals that otherwise seem unattainable.

For instance, numerous African countries have committed to achieving UN Sustainable Development Goal (SDG) 10 which aims for remittance fees below three percent. Despite this commitment, with just over five years remaining until 2030, many African nations are far from reaching this goal.

Interestingly enough, some Africans working abroad have been sending funds to their loved ones using digital assets or blockchain-based platforms, often at fees well below three percent. Take the stablecoin USDT on the Tron network as an example. Remitting funds between USDT addresses incurs a flat fee of approximately $1.5, regardless of the transaction amount. The transaction fees are even lower when using several other digital assets.

However, due to regulatory reluctance or outright bans, recipients of USDT or other digital assets residing in Africa often resort to vendors and underground platforms that charge exorbitant fees. Clearly, the blockchain-based solution is efficient and cost-effective, but regulatory roadblocks make it seem like a costly option. This effectively hinders widespread adoption of

The above is the detailed content of Africa's Ultra-Conservative Approach to Innovation Has Stifled Its Residents and Stifled Talent. For more information, please follow other related articles on the PHP Chinese website!