Policy and regulatory developments shaping Africa’s fintech landscape (2024-2025) and projections for the coming years — Part II

In the first blog of this series, we highlighted fintech policy and regulatory developments in Africa by focusing on the AfCFTA Digital Trade Protocol and Rwanda’s National Fintech Strategy. In this second installment, we turn our attention to some fintech regulatory developments in Kenya, Tanzania, and South Africa.

• Kenya’s crypto regulation

In what is considered the start of the crypto asset revolution, in 2008, an anonymous individual or group under the pseudonym Satoshi Nakamoto published a whitepaper titled — Bitcoin: A Peer-to-Peer Electronic Cash System. Later on, Bitcoin, an unbacked crypto asset, was launched in 2009. 

As the crypto market has grown, regulators and policymakers have sought to regulate financial services related to crypto. These services are numerous and include crypto exchanges, wallet providers, and initial coin offerings (ICOs). 

In early 2025, Kenya’s Cabinet Secretary for National Treasury and Economic Planning unveiled the Virtual Assets Service Providers Bill 2025.

This bill seeks to introduce a bespoke legal framework for virtual assets and virtual assets service providers. Kenya’s move aligns with a growing trend across the continent to establish bespoke regulations for crypto assets. For instance, Mauritius introduced the Virtual Asset and Initial Token Offering Services Act in 2021, followed by Botswana’s Virtual Assets Act in 2022, and Namibia’s Virtual Assets Act in 2023.

In Nigeria, the bespoke regulatory framework is contained in the Rules on the Issuance, Offering Platforms and Custody of Digital Assets issued by the Securities and Exchange Commission, and the Guidelines on Operations of Bank Accounts for Virtual Assets Service Providers issued by the Central Bank of Nigeria. 

However, not all countries have opted for bespoke legislation. South Africa, for example, has taken a different approach by integrating crypto assets into its existing legal frameworks. In 2022, the Financial Sector Conduct Authority (FSCA) classified crypto assets as financial products. This move brought them under the regulatory scope of the country’s Financial Advisory and Intermediary Services Act.

• Tanzania’s regulatory sandbox

In November 2024, the Bank of Tanzania unveiled its Fintech Regulatory Sandbox Regulations, which establishes a sandbox for firms to test innovative financial solutions, including financial services, products, technologies, and business models within a controlled environment under regulatory supervision. 

The sandbox is accessible to licensed financial service providers, fintech companies partnering with them, and startups offering regulated financial products. Following the testing phase, the Bank of Tanzania will evaluate whether a solution is ready for the market or poses risks to the public or financial stability. Similar regulatory sandbox initiatives have been introduced in other African countries. For example, in 2021, the Central Bank of Nigeria launched its Framework for Regulatory Sandbox Operations. Likewise, South Africa’s Intergovernmental Fintech Working Group administers the Innovation Hub, which also incorporates a sandbox component. These efforts reflect a broader regional push to support technology-driven financial innovation while maintaining regulatory oversight.

• South Africa’s open finance and AI initiatives

Data is the lifeblood of modern financial services, underscoring the need for frameworks that enable secure and efficient data sharing. The two notable data-sharing schemes that facilitate this are open banking and open finance. 

Nigeria’s Central Bank has issued two frameworks that support open banking, namely, the Regulatory Framework for Open Banking, 2021 and the Operational Guidelines for Open Banking, 2023. 

Similarly, South Africa is making strides in this space. In March 2024, South Africa’s Financial Sector Conduct Authority (FSCA) released a policy recommendation paper outlining its vision for open finance. Some of the recommendations highlighted include:

• Mandatory regulation and licensing of open finance participants.

• Development of data protection and sharing standards.

• Establishment of consumer recourse mechanisms.

As artificial intelligence (AI) becomes increasingly integral to financial services, South Africa is also taking a proactive stance on its regulation. In its three-year regulatory plan, covering April 1, 2024, to March 31, 2027, the FSCA highlighted that it is exploring high-level governance principles for AI and machine learning. This comes amid global discussions on AI regulation, particularly following the European Union’s AI Act.

The FSCA also noted that it is considering updates to existing frameworks for operational risk, resilience, and cloud computing. 

• Central bank digital currencies

The rise of crypto assets has spurred interest in central bank digital currencies (CBDCs). These currencies are simply digital versions of a country’s fiat currency, issued, backed, and regulated by the central bank. Africa’s CBDC landscape is a mixed bag.

In 2024, Zimbabwe launched the ZiG, which is a gold-backed digital currency. The ZiG is unique from other CBDCs because it is backed by a reserve. Other CBDCs, like Nigeria’s eNaira, which was launched in 2022, are fully fiat currencies in the sense that their value is not backed by physical assets. Nigeria’s Central Bank has issued the Regulatory Guidelines on eNaira, which provides the bespoke legal framework for the operationalisation of the retail CBDC.

Other countries like Ghana and South Africa are in the pilot phase of their CBDC projects, while countries like Morocco and Algeria are in the development phase. Most other African countries are still in the research phase. Some reports suggest that Kenya and Senegal’s CBDC projects have been cancelled, highlighting uncertainties surrounding the issuance of CBDCs. 

As Africa’s fintech ecosystem continues to evolve, regulators are expected to place greater emphasis on emerging technologies and trends that present both opportunities and challenges. In the next and final installment of this three-part series, we will conclude with projections for the future of fintech policy and regulation in Africa.

Written by Dr. Albert Puja & Prof. Vivienne Lawack of the African Fintech Law and Regulation Network (AFLARN)

About The Author