Opportunities and Challenges of Cryptocurrency Adoption in Seychelles

• A nationwide survey showed an estimated 1257 crypto owners exist among 100,000 people.
• Virtual Asset Service Providers or VASP companies must have a license to operate any crypto asset within the country.
• At the beginning of 2022 Seychelles cabinet announced a new policy proposal for the new CBDC adoption in Seychelles.

The African crypto ecosystem is a thriving franchise. It has empowered millions of users throughout the continent to access another source of financial gain. In most cases, the top crypto asset trading and adoption, revolve around five key countries; Kenya, Nigeria, South Africa, Ghana and Egypt.

However, Seychelles has taken the frontier of crypto, not because of its trading volume but due to its government participation. Its government has advocated for both digital currency and CBDC adoption.

Despite its competitor’s high crypto trading volumes, the progress of digital currency eventually means something when government aid comes to play. As such, cryptocurrency and blockchain adoption in Seychelles is steadily growing, given its reasonably small population.

Cryptocurrency in Seychelles; Acceptance outweighs trading Volume

Africa’s crypto industry mainly thrives due to the effort of the select countries mentioned above. Their crypto trading volumes have earned the theme a place as one of the general top “crypto nations” in Africa. A prime example is Nigeria, the only African country among the top 15 nations trading Bitcoin. Despite its efforts, its government is still sceptical about recognizing crypto assets as a financial product. The same goes for almost all African nations, with a few exceptions, such as South Africa and Seychelles. 

Also, Read Crypto trading in Africa is on the rise despite challenges.

In truth, cryptocurrency trading volume in Seychelles is a bit wanting. A nationwide survey showed an estimated 1257 crypto owners exist among 100,000 people. This is relatively low compared to other nations, such as Nigeria, with more than 30 million crypto owners. Fortunately, this figure directly reflects the low population of Seychelles of 107,118.

 

Fortunately, its governments have seen an opportunity to embrace digital currency. Especially given its minute population establishing and regulating crypto assets would be easier.

Seychelles’ finance ministry and capital market regulator are working on a policy framework for the country. Vice President Ahmed Afif said digital curency is the next revolution and governs the population. Its digital curency adoption would be relatively simple to control and manage.

In terms of blockchain addition, this small African country has also taken the initiative to educate its youth on the abilities of this new technology. MERJ Exchange, located in Seychelles, was the first company to develop a mechanism that lists tokenized security in their stock. In doing so, Seychelles has officially outranked its competitors, such as the Swiss exchange company and Gibraltar Stock Exchange. 

With these accomplishments, the application of blockchain into the economy directly became more practical, and soon after, crypto in Seychelles had the government’s support.

To establish crypto in Seychelles, they needed regulations.

Unfortunately, it is generally “economic suicide” for any government to directly incorporate e digital curency without having set regulations. Fortunately, establishing laws and regulations for digital curency adoption in Seychelles was pretty straightforward. Seychelles’ government drafted a crypto regulation that would impose strict and uncompromising regulation to control crypto in Seychelles and existing Virtual Asset Service Providers or VASPs.

Today, VASP companies must have Seychelles to operate any crypto asset within the country. This encompasses practically every digital currency within the nation. Local authorities have conducted a national risk assessment of digital means to outline the monitoring of crypto licenses in Seychelles. This has significantly minimized the risks associated with digital curency adoption in Seychelles. A crypto license in Seychelles is universal, and all crypto firms must adhere to its regulations.

With the success of safe and secure digital curency adoption, its government sought to take the next step in incorporating crypto in Seychelles, CBDC. At the beginning of 2022 Seychelles cabinet announced a new policy proposal for the new CBDC adoption in Seychelles. Africa’s crypto industry is vastly growing, and various countries are gathering information to find the best way to regulate and adopt CBDC in Seychelles. The proposal for the CBDC adoption in Seychelles aligned with the Central Bank of Seychelles’ initiative to modernize their small country and develop a National pay system.

Also, Read the Central African Republic announced plans for the new crypto regulation framework.

With these two concepts aligned, its government has deployed various actors researching how to establish and profit from CBDCs. The technology would interconnect SeyChelles’ entire population. In addition, deploying a blockchain system would be more straightforward in Seychelles than in any other African country, especially given its small population. According to IMF, CBDCs are more cost-efficient than physical cash, given their low transaction cost. They would eventually interconnect each citizen and offer the opportunity of added financial inclusion. Every citizen in Seychelles would directly access the banking system from their smartphones.

Bitget eyeing Seychelles

Cryptocurrency in Seychelles will soon be a much friendlier ecosystem than the rest. It may have a small field, but with its relatively high CBDC and digital currency adoption rate, it has garnerd the attention of various crypto exchanges. Bitcget is one of the world’s leading crypto exchanges with innovative products and services.

To the decentralized nature of Bitget, there is technically no specific headquarters, but it has several regional hubs. Bitget revealed his plans to setting up shop in Seychelles with the primary goal of increasing its workforce. According to Bitcget, Seychelles is among Africa’s few open crypto communities. CBDC and digital currency adoption in South Africa have created the perfect ecosystem to utilize and openly grow Africa’s crypto Industry. The registration in Seychelles will offer a constructive environment for Bitget and positively impact CBDC adoption in Seychelles. 

Conclusion

Cryptocurrency in Seychelles might not have the massive trading volumes experienced in other countries, but it outweighs them in its adoption rate. Currently, most countries need to be more sceptical about even approaching the concept of digital currency adoption.

To Seychelles’ government, this is not more than a project it can use to unite its nation further and adopt financial inclusion through crypto assets. It may have a small presence in Africa’s crypto industry, but its government’s approval will help in the long run. CBDC adoption in Seychelles may happen sooner than expected, especially after South Africa has already announced it officially recognizes crypto as a financial product.

Also, Read Crypto regulation framework in Africa: Why we need it and who benefits.

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• Source: https://web3africa.news/2023/02/21/news/the-state-of-cryptocurrency-in-seychelles/