On Monday, the Central Bank of Sudan warned citizens against investing in cryptocurrencies because of the risks associated with such coins, which include market volatility, financial crime, and electronic piracy.
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The watchdog also stated that digital currencies couldn’t be regarded as legal tender because they are not issued by accredited or authorized legally bound bodies.
The warning by the Central Bank comes as a response to the increased adoption of cryptocurrencies like Bitcoin in the nation during the economic crisis. Recently, Sudan’s Central Bank noticed the widespread global spread of the phenomenon of promoting trading in crypto coins through social networking sites. Investing funds in cryptocurrencies is small but a growing trend in Sudan.
The North African nation’s economy is under increasing strain after an October military coup derailed its path to democracy and suspended overseas aid worth billions of dollars. Inflation soared 360% in 2021 before slowing to 260% in February last month.
The Status of Cryptocurrency in Sudan
Sudan is an African country where some tech-savvy groups and start-ups have started to adopt cryptocurrencies. In the past years, cryptocurrency has been adopted by many sectors in the nation. Digital currencies are trendy among young, tech-savvy people, and the group’s members are actively working to make the system viable for moving money out of the country and purchasing goods abroad.
Digital currencies have become a viable alternative in Sudan because the nation is a “sanctioned country.” Remittances are high cost and quite complex via official channels, making cryptocurrency the most accessible and affordable way to transfer funds.
In June 2020, Sudan joined the Better Than Cash Alliance, a global partnership of 77 governments, firms, and international organizations that accelerate the transition from cash to responsible digital payments to assist in achieving the Sustainable Development Goals.
Sudan joined the alliance as part of its efforts to modernize the government services and payment system. As a result, the new digital environment and shift in the culture have helped accelerate crypto adoption at the state level.
In a country with only 31% internet penetration, the acceptance of Bitcoin by users has been high. Sudan is recognized as one of the countries with a high demand for cryptocurrencies, despite the low trading volume. The adoption currently might be limited to certain areas like the capital, Khartoum, and within tech companies and investors.
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