- Sudan’s apex bank warns its citizen against cryptocurrency.
- The depreciation of the Sudanese Pounds continues.
According to a report by the state’s official news outlet, Sudan News Agency (SUNA), the Central Bank of Sudan (CBoS) has put out a message to warn its citizens about trading all forms of cryptocurrency.
The country’s apex bank stated that cryptocurrencies are not issued by any recognized or accredited authority. Hence, they are vulnerable to financial crimes, digital piracy, and a high level of volatility. The Central Bank of Sudan (CBoS) also emphasized the legal risks involved, as cryptocurrencies are not regarded as money, private money, or property according to the country’s laws.
Cryptocurrency bans in Africa
Interestingly, the North-Eastern African country is not the only African nation to express concerns over cryptocurrency. Per a report from the United States Library of Congress (LoC), 23 out of 51 countries that have placed a ban on cryptocurrencies are African countries. However, this LoC report is paradoxical to a Brookings Institution report that ranks Africa as the fastest-growing cryptocurrency market.
According to Chainalysis, Africa’s crypto market saw an influx of $105.6 billion between July 2020 to June 2021. Nevertheless, 4 African countries, namely Algeria, Morocco, Tunisia, and Egypt, have implemented an absolute ban on crypto. Meanwhile, 19 countries, including Nigeria, the most populous black nation and Africa’s largest economy, have placed a rather tacit ban on cryptocurrency.
On 5 February 2021, the Central bank of Nigeria released a circular prohibiting banking institutions from dealing in cryptocurrency or enabling payments for cryptocurrency transactions. However, Nigerians are still allowed to own crypto assets.
Sudanese Pounds continues to hemorrhage value
The warning on cryptocurrency by Sudan’s apex bank comes as the country’s currency, the Sudanese Pound, endures a significant dip in value following a coup last October. The forceful removal of a democratically elected government led to the withdrawal of international economic support from the country.
As a result, there has been a high demand for a relatively low supply of U.S dollars, leading to the Sudanese Pound losing more than a third of its value. Consequently, there have been unfavorable hikes in the price of food and other commodities.
In the month of March alone, the Bank of Sudan has had to devalue its currency twice to keep the economy afloat. At current exchange rates, one U.S dollar equals 447 Sudanese Pounds. This dire economic situation has made saving in cryptocurrency more attractive and logical to Sudanese citizens.