Blockchain in Africa

BLOCKCHAIN IN AFRICA:
OPPORTUNITIES AND CHALLENGES FOR THE NEXT DECADE

How African countries can take advantage of distributed ledger technologies as
they are maturing
LIST OF ABBREVIATIONS
AML Anti-money laundering
BIS Bank for International Settlements
CBDC Central bank digital currency
CDD Customer due diligence
CFT Counter terrorism financing
DLT Distributed ledgertechnologies
FATF Financial Action Task Force
INATBA International Association of Trusted Blockchain Applications
KYC Know your customer
RAPDP African Data Protection Network

Réseau Africain sur la Protection des Données
SME Small and medium enterprises
Edited by Olivier Gakwaya, Dr Uta Meier-Hahn,

Dr Ralph Oyini Mbouna and Lars Wannemacher
The Smart Africa Secretariat (SAS) and Deutsche Gesellschaft für

Internationale Zusammenarbeit (GIZ) would like to thank the following
authors who contributed to this white paper: Theodor Beutel, Olivier
Gakwaya, Maike Gericke, Jonas Gross, Florian Henrich, Atilla
Kaiser-Yuecel, Jan Krewer, Dr Uta Meier-Hahn, Benjamin Onuoha,
Dr Ralph Oyini Mbouna, Dr Jörg Pohle, Dr Nina-Luisa Siedler, Lars
Wannemacher, Sara Weiss, Franz von Weizsäcker
Kigali, Rwanda, 2020.

TABLE OF CONTENTS
PREAMBLE.......................................................................................................................................................................... 5
EXECUTIVE SUMMARY....................................................................................................................................................... 6
1. INTRODUCTION: BLOCKCHAIN TECHNOLOGY IN A NUTSHELL.............................................................................. 8

1.1 Core features...................................................................................................................................................... 9
1.2 Known limitations.............................................................................................................................................. 10
2. THE EMERGING BLOCKCHAIN TECHNOLOGY ECOSYSTEM ON THE AFRICAN CONTINENT:

USE CASES AND EXAMPLES .....................................................................................................................................12
2.1 Digital payment infrastructures:
blockchain-based digital currencies from central banks vs. stablecoins .......................................................... 13
2.1.1 Stablecoins........................................................................................................................................14
2.1.2 Central bank digital currencies..........................................................................................................14
2.1.3 Fiscal and geopolitical dimensions...................................................................................................16
2.2 Public spending and governance ..................................................................................................................... 17
2.3 Peer-to-peer trading of electricity ..................................................................................................................... 18
2.4 Digital claims of identity and ownership............................................................................................................ 19
2.4.1 Land registration................................................................................................................................19
2.4.2 Verifiable digital education credentials.............................................................................................20
2.5 Tracing agricultural supply chains..................................................................................................................... 22
2.6 Trade facilitation................................................................................................................................................23
3. POLICY CONSIDERATIONS..........................................................................................................................................24
3.1 Blockchain technology and data protection...................................................................................................... 24
3.1.1 From regulatory goals to legal techniques .......................................................................................27
3.1.2 Legal design choices to operationalise
data protection objectives for blockchain technology.......................................................................28
3.1.3 Supervisory authorities and enforcement in the face of blockchain technology...............................32
3.2 Financial regulation: considerations for distributed ledger technology
applications in finance......................................................................................................................................33
3.3 Existing national blockchain strategies under review ...................................................................................... 35
3.3.1 Between promoting innovation and preventing crime.......................................................................36
3.3.2 Capacity building and research........................................................................................................37
3.3.3 Policy approaches.............................................................................................................................37
4. RECOMMENDATIONS FOR THE DEVELOPMENT OF BLOCKCHAIN TECHNOLOGY IN AFRICA......................... 42

4.1 Strategy: entering a blockchain-enabled future with a plan.............................................................................. 43
4.2 Data protection harmonisation: creating equivalent levels of data protection across
the African continent ........................................................................................................................................44
4.3 Data protection and blockchain: clarifying the viability of distributed ledger
system designs.................................................................................................................................................45
4.4 Financial regulation: creating legal certainty without stifling innovation............................................................ 46
4.5 Capacity building: increasing readiness for uptake of blockchain technology in Africa.................................... 47
4.6 Public utility: a pan-African blockchain service infrastructure........................................................................... 48
4.7 Interoperability and standards: aligning with global standards and best practices........................................... 49
5. APPENDIX: NATIONAL BLOCKCHAIN STRATEGY DOCUMENTS............................................................................ 50

4
5
PREAMBLE
Blockchain technologies have been finding real-world utility across Africa
and the world at large over the last few years. The concept of blockchain
is still getting traction daily and use-cases are still being understood
as innovators and innovation ecosystems define new ways of bringing
blockchain technologies into the real world. What we can be certain of
is that these technologies have immense potential for addressing some
challenges that Africa faces.
There are key principles that are inherent to blockchain, such as trans-
parency, and decentralization which on the surface, can address many of Africa’s challenges. From
elections, to international remittance, as well as energy services and alternatives to banking; Africa
has many developing systems that could benefit from this technology.
The purpose of this paper is to proffer a critical assessment of these technologies in order to
understand them better. This in turn helps us to understand the potential use cases. We delve into
essential use cases within this document related to key verticals that form the digital economy and
Africa’s immediate digital agenda. These include key aspects such as digital payments, gover-
nance, public spending and trade facilitation among others.
Its is important to offer a critical view of blockchain technologies and to be objective about what
can work in Africa and what cannot work. We need to be certain that the use of blockchain does
not amount to the surrendering of sovereignty and data protection rights. The technology we adopt
must enhance Africa’s progress towards a single digital economy.
At the end of it all, this paper gives a number of recommendations based on the understanding we
have collectively developed.
We thank our partners from Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and
a committed team from the Smart Africa Secretariat for the work they have put into this paper. It
is through strategic partnerships such as these, that we will achieve great strides in our journey
towards a single digital market.
Mr Lacina Koné
Director General of Smart Africa
6
EXECUTIVE SUMMARY
Few technologies have oscillated between public appreciation and depreciation, between hype and
caution as much as as blockchain technology has since its inception roughly a decade ago. This
paper offers a fresh view on blockchain technology as it is maturing. The purpose is to inform African
decision and policy makers about viable use cases and about the policy choices that need to be made
in order to take full societal advantage of distributed ledgers and related technologies.
As part of this paper, we look at blockchain with a focus on its key characteristics and remaining short-
falls that inform the following use cases. Besides drawing on the actual practicability of the specific
use cases based on the technology as to date, we also considered the maturity of existing use cases
in our selection. Now, we gathered those use cases that, at this point in time, appear most feasible,
promising or as in the case of digital payments politically pressing for the African continent. The use
cases are:
• Digital payment infrastructures, including central bank digital currencies,

• Public spending and governance,
• Peer-to-peer energy trading,
• Digital claims to land ownership,
• Digital claims to education credentials,
• Tracing agricultural goods along supply chains and
• Trade facilitation.
This list of use cases is far from being comprehensive. The innovation ecosystems constantly bring
up novel applications of blockchain and combinations with various other technologies such as internet
of things and artificial intelligence as well as common databases. The relevant topics of digital ID and,
related, self-sovereign identity will be addressed in depth in a separate publication by the Smart Africa
Secretariat.
To inform African decision and policy

makers, a bird’s eye view on the
"Blockchain-based systems are neither interlinkage of blockchain technology
generally compatible nor incompatible into legislative and financial frame-
works is required, to enable its
with regulatory dimensions of data continued and safeguarded use on the
protection, anti-money laundering and continent. A key component for such
safeguarding are questions on the
counter-terrorism-financing." compatibility of blockchain technology
and data protection on one hand and
anti-money-laundering as well as
counter-terrorism-financing on the other. We argue that blockchain-based systems are neither
generally compatible nor generally incompatible with these regulatory dimensions. Still, the technology
can be at tension with several themes that are central issues in data protection, including objectives
chosen by the legislator, "secrecy" versus "transparency", "remembering" versus "forgetting" (or a
"right to be forgotten"), updates and corrections, data subjects’ rights, and regulatory oversight and
enforcement - all of which are looked at within the scope of this paper.
In summary, any approach to regulate blockchain technology should commence with a clear consen-
sus on regulatory objectives that are based on the particular positions of the governments involved.
From there, regulatory means to realise these objectives can be drawn.
We conclude this report with the following recommendations to African decision and policy makers:
• Strategy: develop a pan-African blockchain strategy in accordance with the African Union’s digital
strategy.
• Data protection harmonisation: seek pan-African harmonisation of data protection by negotiating

consensus on the regulatory goals. Leave regulatory means to individual countries while creating a
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mechanism for mutual recognition of data protection laws. Man-

date public authorities for monitoring and enforcing data protec-
tion laws, equip them with the necessary powers and resources.
• Blockchain-specific considerations for data protection:

decide about policy options at the intersection of data protection
and blockchain technology according to the values and policy
goals of individual countries and the African community, not
according to real or perceived technical constraints. Establish
"data protection by design" provisions in data protection laws.
• Financial regulation: develop a pan-African concept for token

classification, including security tokens, tokens representing
financial instruments such as e-money and unregulated tokens.
Create disclosure and registration regimes for security tokens.
Introduce license regimes for service providers concerning
security and other financial instruments tokens.
• Capacity building: support research and education about blockchain technology and blockchain
governance. Foster skills, develop talent and stimulate innovation.
• Push for interoperability and harmonised standards, specifically to enable interconnectivity

between different blockchains.
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1. INTRODUCTION: BLOCKCHAIN
TECHNOLOGY IN A NUTSHELL
Blockchain technology describes a new way of data handling. It refers to a specific form of distributed
ledger architecture, which stores transactions in a list of blocks, which are linked cryptographically.
Due to their similar use in the public discourse and despite the slight imprecision, the terms distributed
ledger technology (DLT) and blockchain are being used interchangeably in this paper.
Blockchain follows in a long tradition of

physical and digital accounting technol-
"Digital ledgers, including blockchain, ogies. Historically, traders used books of
brought about a major change as lists lists (i.e. ledgers) to track the goods they
bought, sold and traded (i.e. transactions).
of transactions are no longer stored In modern times, these ledgers became
in one central location." more diverse, as they included account
balance sheets, cadastre systems or
identity records. Until recently, however,
they remained centralised, meaning that
one entity was in control over the system - be it records on paper or in digital form. Digital ledgers,
including blockchain, then brought about a major change as lists of transactions are no longer stored
in one central location. Instead, multiple parties share control over simultaneously maintained copies
of the same ledger.
An in-depth technical explanation of blockchain or DLT at large would go beyond the scope of this
paper.1 Additionally, for decision and policy makers the most important concepts to conceive are the
characteristics of blockchain that make it appropriate for new private and public use cases. It also
must be noted that no blockchain system exists in isolation. In order to provide many of the features
noted below, any blockchain requires a trustworthy governance model.
In light of the purpose of this paper - which is to inform decision and policy makers about opportunities
and preconditions for the implementation of blockchain technology - and acknowledging that there
is not one genuine and universal definition of blockchain, we offer the following working definition of
blockchain technology before looking at some specific properties, i.e. distribution, public and private
blockchains, immutability, incentivisation and automation.
Working definition: A blockchain is an append-

only list of transactions which are stored in
blocks and secured through cryptography.
A decentralised peer-to-peer (P2P) network
of computers is processing, verifying and
validating all entries.
DATABASE / LEDGER
P2P-NETWORKS CRYPTOGRAPHY
TECHNOLOGIES
Figure 1: The technologies

behind blockchain BLOCKCHAIN
1 This chapter is particularly informed by Bogensperger, A., Zeiselmair, A. and Hinterstocker, M., 2018. Die Blockchain-Technologie -
Chance zur Transformation der Energieversorgung?. Forschungsstelle für Energiewirtschaft e.V. (FfE). Available at:
https://www.ffe.de/attachments/article/803/Blockchain_Teilbericht_Technologiebeschreibung.pdf [Accessed 8 May 2020].
For conceptual differentiation see e.g. Rauchs, M., Glidden, A., Gordon, B., Pieters, G., Recanatini, M., Rostand, F., Vagneur, K. and Zhang,
B., 2019. Distributed Ledger Technology Systems: A Conceptual Framework. Campridge Centre for Alternative Finance. Available at:
http://dx.doi.org/10.2139/ssrn.3230013 [Accessed 8 May 2020].
9
1.1 Core features

Distribution: Blockchains are designed to be physically dispersed. The entries on a blockchain do
not sit on a single server, e.g. of a bank or government agency, but are at the same time distributed
across many computers that form a network. This means that original copies of the same data are
stored in different locations. Even if part of the network goes down, the ledger remains accessible
to all other participants in the network. In fact, unless all nodes in the network go down, the integrity,
availability and operability of the ledger as a whole is maintained. This is a strong resilience property.
Imagine proof of educational claims remaining easily available even if a university’s server is de-
stroyed in a natural disaster.
In order to ensure that these copies of the same data are fully identical and synced in real time, block-
chain technology makes use of various consensus mechanisms. This enables participating parties of
the network to computationally find consensus on what information is stored on the blockchain, and,
thereby, put trust in the system and in one another without actually having to know the other partici-
pants in the network. Thanks to these consensus mechanisms2 - and depending on their formulation
- blockchains work without a centralised entity, e.g. an administrator managing the ledger.
Public vs. private, permissioned vs. permissionless blockchains: The attribute of distribution
holds especially true for public permissionless blockchains.3 By design, these blockchains operate
on the open internet and allow for anyone to read, write and verify transactions by operating a node
in the network. Public permissioned blockchains meanwhile are also accessible on the open internet,
but they limit the ability to verify transactions to a selection of participants or by certain conditions.
The openness of public blockchains potentially makes for a high degree of architectural and political
decentralisation4 and making them maximally resilient to malicious adaptation. In contrast, private, so-
called federated/consortium/syndicate distributed ledger networks are managed by one or a number
of entities that may limit read-and-write access of the blockchain and determine the ruleset for verifica-
tion.5
TRANSACTIONS ON A BLOCKCHAIN
...which is then broadcasted These nodes validate the request

A user requests
to all participants transaction via a so-called
a transaction
of a blockchain network. consensus mechanism.
Transactions can involve any type of data

such as records, reports or cryptocurrencies
The new block is appended Upon validation, transactions

The requested transaction
to the existing blockchain are collated into a block of
is now completed.
and is now unalterable. data for the ledger.
Figure 2: Transactions on a blockchain
2 The most common consensus mechanisms currently include so-called Proof-of-Work, Proof-of-Stake and Practical Byzantine
Fault Tolerance.
3 Prominent examples of public blockchains are the Bitcoin blockchain - best known for the associated cryptocurrency -, and the
Ethereum blockchain.
4 Vitalik, B., 2017. The Meaning Of Decentralization. Available at:
https://medium.com/@VitalikButerin/the-meaning-of-decentralization-a0c92b76a274 [Accessed 8 May 2020].
5 Prominent private blockchains are Hyperledger Fabric and Quorum; a large federated blockchain is the R3 Corda Network.
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Immutability: Once a transaction is confirmed by the participating parties and written into the ledger,
the protocol does not allow for any changes to be made after-the-fact. This is on the one hand due
to the distributed logic and consensus mechanisms of the ledger, but also based on the particular
structure of a blockchain. Here, new information is saved in self-referencing blocks that are added to
an add-only chain [see Figure 2]. Previously stored information is not overwritten, and retrospective
manipulation is nearly impossible in public and permissionless blockchains. The particular data struc-
ture of distributed ledgers and blockchains ensures the integrity of each individual ledger entry and
the accuracy of the ledger as a whole. Any attempt to alter the data ex-post would be rejected by the
consensus rule, and the attempt itself would become visible to all participating parties. This ensures
an extremely high level of data integrity in public/permissionless blockchains. Immutability means that
high data quality is particularly important in blockchain systems.
Incentivisation: In order to foster the trust in the status of the ledger that blockchain is widely praised
for, the technology may rely on incentivisation mechanisms that encourage network participants to
behave positively. As part of a blockchain’s consensus mechanism, for example, participants may be
rewarded (economically) when positively contributing to the system (i.e. by processing and validating
transactions). An example for this reward system is the Bitcoin blockchain, where successful valida-
tion of new transactions is rewarded in the payout of bitcoins. In other scenarios, negative incentivisa-
tion is also possible, as participants are discouraged from malicious behaviour that would ultimately
harm the system and themselves. Such incentivisation schemes, born from game theoretical princi-
ples, are a core characteristic of public/permissionless blockchain protocols. They can also be adapt-
ed for a variety of scenarios and use cases. By representing certain economic rewards or real-world
goods in the form of digital tokens and by defining clear means to earn these tokens, participants of
a blockchain can be encouraged to behave in desirable manners. An example of this are community
coin systems that reward the purchasing of local goods instead of imported products.6
Automation: Unlike a centralised database held by a single entity, a blockchain continues to run
even if individual participants or machines stop participating in the network. Just like the availability of
stored data does no longer depend on a single machine within the network, the processing of code
does also no longer run on a single computer or server. Instead, code can run directly on a block-
chain, following the logical iterations that it was programmed to process: If transaction A has taken
place, then transaction B will automatically be executed. This capacity is also known as smart con-
tracts. Running such an if-then-statement independently from a centralised processing unit or server
enables a new level of automation through blockchain technology.
1.2 Known limitations

A number of technical challenges remain as obstacles to a more widespread uptake of blockchain
across sectors. Surely, this can be attributed also to the maturity of blockchain as a technology, which
is continuously growing with further use cases across the globe.
Scalability: Currently, the number of transactions that can be executed per time unit on most block-
chains is very limited. Due to the size limitations of individual new blocks on the chain and the redun-
dancy of linked previous blocks, the speed of processing transactions is comparably low. Therefore,
scaling blockchain-based projects to industry-scale is a key challenge that needs to be addressed or
worked around.
Privacy: Most blockchains do not currently provide sufficient levels of privacy as required for gov-
ernment and enterprise applications. While the major public blockchains reveal data and metadata
publicly and permanently, many private and permissioned blockchains allow some form of privacy. For
instance, data may be public among the members of a particular blockchain consortium, but private to
non-members. However, private and permissioned blockchains may not provide for the level of trust
and immutability and heavily rely upon their off-chain governance structure to ensure reliability of their
content.7 Moving forward, both private and public blockchains are expected to enhance privacy based
on so-called zero-knowledge proofs.
6 See Gericke, M., 2019. New Report Release: Community Currencies. PositiveBlockchain.io. Available at: https://positiveblockchain.io/
new-report-release-community-currencies/ [Accessed 8 May 2020].
7 Off-chain governance refers to the rules that determine the operation of the blockchain system itself (governance of the infrastructure),
whereas on-chain governance refers to rules such as incentivisation or smart contracts that are directly encoded into the blockchain (gover-
nance by the infrastructure).
11
Interoperability: To little surprise, the young technology has not seen sufficient streamlining through
standards across sectors and industries. This leaves businesses with difficult decisions on the use
of specific blockchains that are currently not interoperable. While projects are working towards an
increase in interoperability, achieving this as an industry-wide standard will require additional time.
Infrastructure: Logically, any blockchain-based system will rely on the existence of functioning and
reliable infrastructure, including internet connectivity. While the choice between a variety of block-
chains (e.g. private vs. public) may to some degree alleviate this precondition, it remains a key factor
of consideration for any implementation - especially in the African context.
In addition to these technical challenges, blockchain

technology also commonly faces a number of difficulties
"The field of blockchain in its application due to its technical characteristics and
development remains in flux their contextualisation in the real world. This specifically
entails the following problems:
and is rapidly changing."
The digital representation of assets, also known as the
oracle problem: Representing material and immate-
rial assets that are not yet in a digital form is an overarching difficulty across sectors. It needs con-
text-specific solving before blockchain technology can be applied successfully. Examples include the
traceability of assets in supply chains, e.g. for fashion, pharmaceutical drugs or agricultural goods.
Data quality: Strictly speaking, blockchain technology ensures data integrity and not data quality. The
data stored on a blockchain is only as accurate as it was when entered. Especially as data cannot be
retrospectively changed, high standards on data quality are required in the application of blockchain
technology. In many scenarios, the entry of such high quality data onto the blockchain poses a partic-
ular challenge.
Smart contracts: The automation that blockchain offers by allowing lines of code to be directly
programmed on-chain also comes with its own caveats. As the processed code can no longer be
amended after it was stored on the blockchain, it needs to fulfil the highest quality standards - similar
to data entered on-chain. However, experience of software development proves that programming
bug-free code is virtually impossible. Considering this, the lacking ability to fix badly designed smart
contracts or to update them when external factors make it poses a further complication for the use of
smart contracts.
Integration: Blockchain systems can be difficult to integrate within existing system landscapes. It is
thus necessary to include the integration with legacy systems into the technical design choices. Ad-
vances towards open, interoperable standards serve this goal.
As much as these limitations should be evaluated within the context of any blockchain-based project,
one cannot overstate how the field of blockchain development remains in flux and is rapidly changing.
Therefore, a look at the already feasible use cases and an outlook into the nearest future to ensure
enabling environments for soon-to-be-realised approaches remains worthwhile.
12
2. THE EMERGING BLOCKCHAIN

TECHNOLOGY ECOSYSTEM ON THE
AFRICAN CONTINENT: USE CASES AND
EXAMPLES
The main characteristics of blockchain technology - distribution, immutability and automation - can
underpin both economic growth and social progress because they complement each other in a way
that fosters trust in distributed ledger systems. There is no single point of failure or capture; records
are tamper-proof; parties ideally have a shared interest in maintaining the system and automation
prevents human error once information has entered the system. When put to operation with a solid
off-chain governance model, this can lead to trust in transactions performed without the need of an
intermediary.
For this report, the comprehensive

PositiveBlockchain.io database conduct-
"The main characteristics of blockchain ed original research identifying a total of
technology - distribution, immutability 69 active projects or completed pilots
that apply blockchain technology for their
and automation - can underpin both focus on social good while servicing
economic growth and social progress." parts of the African continent. These
statistics are relevant, because in the
African project landscape, commercial
benefits and social impact often go hand in hand8. Of these impact-focused projects, 57% have their
headquarters on the continent, with the highest number of projects headquartered in Kenya, South
Africa and Nigeria. Most projects with a core focus on social good are for-profit startup initiatives,
followed by non-profit initiatives and public-private partnerships, the latter often including governmen-
tal initiatives and/or initiatives of key industry players. A blockchain ecosystem has started to emerge.
KEY PROJECT CATEGORIES
Finance & Insurance 26
Agriculture & Food 11
Energy 7
Identity & Ownership 6
Aid & Philanthropy 4
Government & Democracy 4
Living Conditions 3
Health 2
Trade & Logistics 2
Products & Consumption 1

Education & Employment 1
Environment 1
0 10 20 30
Number of Projects
Figure 3: Blockchain projects in Africa by sector, according to PositiveBlockchain.io
8 An example for economic and social impact are innovations in cross-border payments, which foster both the financial sector and benefit
communities.
13
This section provides a snapshot of the blockchain ecosystem as it currently exists on the African con-
tinent. It is structured in a thematic order. Each theme is introduced in a way that highlights initiatives
from the dynamic African project scape. It is then complemented with an explainer of the underlying
use cases and links to additional resources in order to ease uptake and adaptation.
We will present the following use cases of blockchain pertinent to Africa. Most of which show how
blockchain technology can ease cross-border transactions - and thereby complement existing efforts
to that end on the African continent:
• Public spending and governance

• Peer-to-peer trading in off-grid scenarios "Blockchain technology can ease
• Education credentials
• Land registration cross-border transactions."
• Tracing agricultural supply chains
• Trade facilitation
2.1 Digital payment infrastructures: blockchain-based

digital currencies from central banks vs. stablecoins
Financial solutions are the most common ones in the blockchain space. More than one third of the Af-
rica-related projects that are recorded in the PositiveBlockchain.io database have their main focus in
this area. This does not come as a surprise: Africans are early adopters of mobile money - more than
half of global mobile-money service operators are located in Sub-Saharan Africa.9 The continent has
the highest unbanked population in the world, the fastest growing population, and the highest propor-
tion of microbusinesses.10 Some Africans already explore the possibilities of using blockchain-based
financial services to reduce the cost of remittance payments, or speculate and invest using cryptocur-
rencies like Bitcoin. Others benefit from community-based lending solutions or community currencies.
One of the biggest game changers, however, in the financial sector is the possible application of a
digital payment infrastructure. It could be based on blockchain or another DLT; it could be operated by
private actors, governments or in new forms of partnerships.
According to a survey of 63 central banks in 2018, whose catchment area covers 80% of the world’s
population, more than two-thirds of these central banks were working on the issue of central bank digi-
tal currencies (CBDC) at various stages. This includes both general-purpose, retail11 CBDCs, which
would provide a direct cash and electronic payment substitute, and wholesale CBDCs, which mainly
involve interbank transfers and collateral.12 Back then, no central bank indicated concrete implementa-
tion intentions yet. Since 2018, however, the playing field of digital currencies has changed. In particu-
lar, Facebook’s announcement to create Libra13 stimulated new discussions and rapid developments.
This private sector driven initiative increased the pressure on existing - and in some cases slowly
progressing - projects in the political arena. European, US and Chinese politicians subsequently com-
9 Chironga, M., De Grandis, H. and Zouaoui, Y., 2020. Mobile Financial Services In Africa: Winning The Battle For The Customer. McK-
insey. Available at: https://www.mckinsey.com/industries/financial-services/our-insights/mobile-financial-services-in-africa-winning-the-bat-
tle-for-the-customer# [Accessed 8 May 2020].
10 The World Bank, 2019. World Development Report. The World Bank. Available at: http://documents.worldbank.org/curated/
en/816281518818814423/pdf/2019-WDR-Report.pdf [Accessed 8 May 2020].
11 Applied to retail payments, DLTs can be used for money transfers denominated in fiat currencies. DLTs use so-called tokens to transfer
values, e.g. information or monetary values, from party A to party B. Each of these digital DLT-based tokens must be fully backed by
respective currency units deposited at a bank, an e-money provider, the central bank or another party. If the tokens are not fully backed by
respective amounts of money, then it would not be possible for all clients to withdraw their funds, which would undermine trust in the project.
Since the DLT itself cannot verify that backing, participants need to trust the e-money provider promising this fact. - That is the reason for
license requirements for e-money providers.
12 Bank for International Settlements, 2020. Proceeding With Caution - A Survey On Central Bank Digital Currency. BIS Papers No 101.
Bank for International Settlements. Available at: https://www.bis.org/publ/bppdf/bispap101.pdf [Accessed 8 May 2020].
13 In its original version (1.0) Libra has been described as a so-called stablecoin, linked to a basket of different financial assets, mainly cur-
rencies (US$, €, £, ¥) and government bonds. After facing a backlash from regulators in many countries, plans for a Libra version 2.0 were
presented, which would omit operation in countries with weak currencies and would include modes of direct cooperation with regulators and
central banks.
14
mented14 on their plans to introduce digital currencies (and the threat they see in these private-sec-
tor-driven currencies).
The following section outlines different design options for digital payment infrastructures, discusses
features and drawbacks and explains possible effects or lines of action for African countries.
2.1.1 Stablecoins
Stablecoins are crypto assets that are designed to minimise volatility by pegging their market value
to an external currency. Currently, there exist various crypto asset projects like Tether, TrueUSD or
Stasis, which issue tokens backed by fiat currencies (fiat-backed stablecoins). Holders of stablecoins
must trust that all tokens are fully backed by assets - typically commodities, fiat currencies or crypto-
currencies. However, worldwide stablecoin issuers are currently not regulated (if they do not promise
to return fiat) and therefore stablecoins are not covered by deposit insurance schemes. This imposes
regulatory risk. Further, liquidity in stablecoins is limited. Hence, customers are exposed to a non-neg-
ligible risk that stablecoins could potentially default, besides apparent liquidity risk.
So far, the following approaches to backing

stablecoins have emerged: e-money and
"One of the biggest game fiat-backed (either by commercial or central
changers in the financial sector is banks). The first refers to regulated stable-
coins that are fully backed by fiat currencies
the possible application of a digital as the issuing e-money institutions only issue
payment infrastructure." DLT-backed tokens per unit of stored fiat. The
latter describes digital versions of fiat cur-
rencies that merely differ in the security they
offer, especially in times of a banking crisis.
2.1.2 Central bank digital currencies

Backing stablecoins by central bank money instead of commercial bank money decreases default
risks for stablecoin holders, depending on the central bank’s trustworthiness and track record. Driven
by the developments around crypto assets and Facebook’s continuous efforts to launch the Libra
project, many central banks have recently announced that they will research the issuance of their own
digital currencies, so-called central bank digital currencies (CBDCs) and thereby take a closer look at
the application of DLT.15 According to a recently published study by the Bank for International Settle-
ments (BIS) this is the case for 70% of all global central banks.16 Of the central banks participating in
the study, 10% stated that they are likely to introduce such digital money in the short term (up to three
years) and 20% in the medium term (up to six years).
Current retail CBDC projects
China is currently pioneering as they might already start their retail CBDC prototype for a digital yuan
or a common digital currency of the BRICS states in 2020. There are also a number of initiatives by
smaller countries: the Eastern Caribbean Central Bank is investigating the application of DLT for a dig-
ital Eastern Caribbean dollar. The Sand dollar of the Bahamas pursues a similar goal and is already
available to Bahamian citizens in a pilot phase since December 2019. The so-called sovereign, a
Marshall Islands crypto asset, shall also be issued in the upcoming months.
14 See von Weizsäcker, F., Meier-Hahn, U. and Wannemacher, L., 2020. Libra Vs. Governments: The Race Towards An Inclusive Global
Payment Infrastructure. Available at: https://medium.com/@GIZ_Lab/libra-vs-governments-the-race-towards-an-inclusive-global-payment-in-
frastructure-a1432124d8fc [Accessed 8 May 2020].
15 Implementing a CBDC does not necessarily imply using DLT; it is one technology option next to regular databases. However, all the
major CBDC prototypes (Sweden, China, Marshall Islands, Bahamas, Eastern Carribean Region) are based on DLT. Therefore, DLT seems
to be highly relevant in the context of a CBDC.
16 Boar, C., Holden, H. and Wadsworth, A., 2020. Impending Arrival - A Sequel To The Survey On Central Bank Digital Currency. BIS
Papers No 107. Bank for International Settlements. Available at: https://www.bis.org/publ/bppdf/bispap107.pdf [Accessed 8 May 2020].
15
Within the European Union, the Swedish central bank (Riksbank) has been analysing the issuance of
a digital version of the Swedish krona (e-krona) since 2017 and is already testing a DLT-based e-kro-
na prototype. The German government’s Blockchain Strategy is committed to the digital euro, and
work is underway with the European Central Bank (ECB) and others to find appropriate solutions.17
The current target is wholesale instead of retail, i.e. not the big disruption (a CBDC for private users),
but "only" a payment infrastructure for the digital euro in interbank business, with some open ques-
tions about the operator model.
In international forums such as the G20, G7, and the World Economic Forum, CBDCs are prominently
on the agenda. On the African continent, the Central Bank of Tunisia is currently examining the poten-
tial and options for action on CBDCs. It appears therefore only as a matter of time until first CBDCs
will be introduced.
Motives for a CBDC introduction
Central banks’ motives for introducing a retail CBDC are manifold. The survey of the BIS shows that
they differ between advanced economies on the one hand and emerging market economies on the
other hand: emerging economies mainly hope to increase financial stability by lowering the concentra-
tion of money in the banking sector, to increase the efficiency of payment transactions, i.e. transaction
time and costs, and increase the security of digital transactions. Another hope by central bankers
in emerging market economies is to increase financial inclusion by introducing a CBDC. A consum-
er-friendly CBDC with low entry barriers such as the opportunity to transact small units of CBDC
without know-your-customer (KYC) requirements could ease the access to digital transaction services
for citizens, who are currently excluded from the financial system (financially excluded). One can
think of the example of M-Pesa in Kenya, where holders of mobile phones can transfer money from
phone to phone. If a CBDC is implemented in a similar fashion and can be transferred peer-to-peer
via phones more citizens would get access
to the financial system. Nowadays, IDs and
"A consumer-friendly CBDC with low bank accounts are most often necessary
to transfer money. However, many citizens
entry barriers could ease the access in developing countries do not have an ID
to digital transaction services for nor a bank account. On the precondition
of eased KYC requirements such a CBDC
citizens, who are currently excluded could be a gamechanger and allow citizens
from the financial system." even to some extent without ID and bank
account to conduct payments.
Drawbacks of a CBDC introduction
Even though a CBDC introduction can have various benefits for the domestic payment system, there
are drawbacks. These have to be addressed when considering the issuance of a CBDC. First, the
introduction of a CBDC can lead to excessive disintermediation of the financial sector if citizens see
CBDC as a close substitute for commercial bank money and transfer large amounts of their bank
deposits to the central bank as soon as CBDCs are available. In this case, banks could lose sizable
market shares. This could threaten the business of commercial banks, trigger liquidity shortages and
in the worst case another banking crisis. Besides, monetary transmission mechanisms are poorly
understood and need to be investigated further.
Secondly, data protection has to be ensured. Currently, wide-spread payment methods such as credit
cards, mobile payments or cash payments have different degrees of data privacy. While in case of
credit card payments, the credit card provider and potentially the partnering bank have insights into
transaction data, cash is the only fully anonymous payment method. Issuing a CBDC without account-
ing for data privacy concerns would go against digital rights and not be desirable.
17 The European approach to promoting the international significance of the euro digitally is moving, as was recently underlined by
EU Council President Ursula von der Leyen. (The Economist. 2020. America’s Aggressive Use Of Sanctions Endangers The Dollar’s Reign.
Available at: https://www.economist.com/briefing/2020/01/18/americas-aggressive-use-of-sanctions-endangers-the-dollars-reign
[Accessed 8 May 2020].)
16
2.1.3 Fiscal and geopolitical dimensions

For developing countries, it is not only relevant to analyse the introduction of their own CBDCs, but
also to assess implications from CBDCs implemented by other countries. If a neighbouring country,
for example, would introduce an interest-bearing CBDC, this could lead to funds flowing into the
neighbouring country, which would influence the respective exchange rates. This would have clear
consequences for domestic economic activity and monetary policy. However, as no country has imple-
mented a retail CBDC yet, the impact of the exchange rate remains speculative and should - like other
unknowns outlined in this chapter - be an object of further research.
In the larger picture, the question which payment ecosystems will be of global importance in the future
is not only important for banking, but also for geopolitical spheres of influence. Not only economic
interests, sanction regimes, but also values can be anchored in the procedures of monetary and pay-
ment ecosystems. For example, how is personal data handled, how are mechanisms against money
laundering and terrorist financing implemented, how high or low are the barriers to participation, how
is technical and political interoperability anchored, how is the degree of centralisation or distribution of
transaction processing (i.e. is it more likely to be a central database or more likely to be a syndicate
blockchain between states with consensus protocols anchored in international law).
It appears likely that the need for international cooperation on CBDCs and the underlying payment
infrastructures will continue to increase, and that foreign policy, security policy and economic policy
objectives will be prominently reflected in this. Different stakeholders are likely to seek to enhance
their geopolitical relevance in the longer term and take an active and also accelerated role in shaping
the future of global monetary and payment ecosystems.
Further information on this use case:
• Report: Central Bank Digital Currency Policy‑Maker Toolkit by the World Economic Forum18
• Research: Overview over current CBDC projects19
18 World Economic Forum, 2020. Central Bank Digital Currency Policy‑Maker Toolkit. World Economic Forum. Available at:
http://www3.weforum.org/docs/WEF_CBDC_Policymaker_Toolkit.pdf [Accessed 8 May 2020].
19 Mehrländer, A., 2020. Overview Over Current CBDC Projects. Available at: https://doi.org/10.5281/zenodo.3817648 [Accessed 8 May 2020].
17
2.2 Public spending and governance

The global Aid Effectiveness Agenda promotes that partner country institutions should have a strong
role in development cooperation. In reality, however, donors have developed their own customised
procedures designed to minimise risks for the disbursement of development aid. Partner countries are
left with the onerous task of collecting financial data and coordinating various donor requirements. As
a consequence, the structural impact of development cooperation remains limited, as local systems
struggle to adequately absorb funds.
Blockchain-based workflow tools can allow for efficient project implementation by offering function-
alities to track expenditures in a collaborative and transparent way. They can help to coordinate the
implementation of donor-funded investment projects by providing a shared and up-to date view on
project-related expenditures and by allowing multiple parties to lock transactions in real time.
Example project TruBudget: Germany’s KfW Development Bank has developed the Trusted Budget
Expenditure software (TruBudget, https://trubudget.net). It serves as a platform for all stakeholders
involved in a development project or programme (e.g. ministries, agencies, donors, auditors). Each
stakeholder receives specific rights based on their role in the project. The software mirrors specific
workflow processes of project planning and implementation and allows for real-time information to be
shared among the users. It would be designed in a way that it can interface (using APIs) with existing
IT-systems of the involved country’s institutions. This means that crucial approval steps, such as a
non-objection to a procurement process or a contract, or the release of payments, can be granted im-
mediately without any delay. All activities are documented in the system and are traceable at all stages.
The software is based on a private blockchain, which provides a tamper-proof database, thus adding
the trust required by donors to integrate with country systems. TruBudget is a modular open-source
software with APIs that is available to anyone free of charge.
Public spending applications of this kind can benefit partner countries and donors in several ways:
• The partner country is in full control of donor funded projects.

• Donors may channel funds through country institutions and trace project-related payments.
• The systems facilitate communication and data management.
• They promise to reduce transaction costs on both sides.
This, in turn, has the potential of increasing the structural impact of development cooperation by
strengthening domestic governance structures and public financial management systems.
The operational model of this use case would see the software to be fully owned, utilised and adapted
by the countries that receive funds. It can serve as a platform for donor-funded initiatives, which would
assist donor harmonisation. Finally, countries would also be free to adapt and use the software for the
implementation of domestic programmes and projects, again benefiting from the increased efficiency
and transparency as the core feature of blockchain-based public expenditure tools.
"Blockchain-based workflow tools can allow for efficient project

implementation by offering functionalities to track expenditures in
a collaborative and transparent way."
18
2.3 Peer-to-peer trading of electricity

Africa’s growing population has key implications for energy demand. While population growth in urban
areas increases demand for industrial production, cooling and mobility, it also implies an additional
need for energy provision in rural areas. Despite progress in various countries, it is estimated that
population growth might likely outpace such efforts. Although the global electrification rate reached
89% in 2017, uninterrupted access to electricity remains a global problem, especially in regions that
are difficult to reach. Sub-Saharan Africa accounts for the biggest shortfall in electrification, where
573 million people are lacking access. Providing families in rural areas with access to affordable en-
ergy and replacing the use of expensive and environmentally harmful diesel and petrol generators is
therefore another focus of emerging blockchain initiatives.
By 2023, the energy sector is foreseen to account for the second largest share of the forecasted
global revenues of 23 billion US dollars for blockchain technology – just after the financial industry.20
The ongoing trend of renewable energy goes hand in hand with an increase in decentralised ener-
gy generation and distribution. This specifically poses a major opportunity for the African continent,
where the need for electrification may be covered in a decentralised manner – without the rigorous
structures of centralised energy markets that exist in many developed countries.
To provide decentralised energy solutions, off-grid solutions for electrification such as microgrids have
been identified as essential. Microgrids are small-scale electricity distribution systems which can be
connected to the main electricity grid or operate independently in "island mode" (off-grid). They are
often used for the distribution of electricity from renewable energy sources. In contrast to conventional
energy trading, which is usually unidirectional, peer-to-peer energy trading within a microgrid environ-
ment allows for direct trading interaction between local energy prosumers and consumers.
In this context, blockchain technology holds the potential to facilitate trading interaction as it functions
as a shared information and transaction platform for all market participants. Electricity generation and
real-time demand are recorded on a blockchain by automatically documenting executed transactions
between the participants using internet-enabled smart meters. The technology’s ability to make even
small data transactions economically viable ultimately entails new degrees of participation and incen-
tives.
Electricity marketplaces are heavily dependent on

data integrity. Therefore, one part of the solution
"Blockchain-based energy needs to collect data streams from decentralised
distribution poses a major electricity feed-in. Validity of this data is best
ensured by using tamper-proof cryptography-
opportunity for the African enabled hardware as well as an algorithm
continent, where the need for cross-checking various data sources against
each other. Based on such validated data
electrification may be covered sources, a blockchain-based electricity market-
in a decentralised manner." place cannot only unite the demand and supply
side for energy purchases. It can also immediate-
ly settle transactions, by monitoring the delivery
of electricity and processing corresponding payments. Smart contracts can ensure that electricity is
requested, for example, when prices fall below a price threshold or when green electricity or local
power is available.
Major challenges include hardware requirements and regulation. This specifically relates to the
requirement of smart meter penetration. As in many countries, energy systems are often heavily regu-
lated by the state or controlled by a state-owned-corporation, a matching legal framework is crucial for
the implementation of energy trading in peer-to-peer microgrids. Even the upgrading of predominant
hardware may require regulatory intervention.
20 Peter, V., Paredes, J., Rosado Rivial, M., Soto Sepúlveda, E. and Hermosilla Astorga, D., 2019. Blockchain Meets Energy - Digital
Solutions For A Decentralized And Decarbonized Sector. German-Mexican Energy Partnership (EP) and Florence School of Regulation
(FSR). Available at: https://fsr.eui.eu/wp-content/uploads/Blockchain_meets_Energy_-_ENG.pdf [Accessed 8 May 2020].
19
• Book Chapter: Microgrids: Applications, Solutions, Case Studies, and Demonstrations21

• Report: Energy progress report 2019 Sustainable Development Goal 722
• Use case: Blockchain-enabled microgrid in Brooklyn23
2.4 Digital claims of identity and ownership

The topic of identity and ownership spans both legal personal identification as well as ownership of
assets e.g. land or property, and personal attributes, e.g. a doctoral degree. Proving one’s identity or
ownership in the digital space as a way to access resources or exercise rights has become increas-
ingly important. Blockchain technology may now deliver the needed infrastructure to provide digital
proof of such claims. Therefore, applications of the technology for digital claims have sprung up
across the globe with specific promises for the African continent. When it comes to identity manage-
ment, projects like Gravity.Earth (https://www.gravity.earth/) provide trusted identities for the econom-
ically excluded, while initiatives like Lawyer’s Hub (https://lawyershub.org/) in Kenya aim to tackle
the issue of continued exclusion of minorities when moving from physical to digital identity systems.
Another initiative in this area is the partnership of the Rwandan Government with WiseKey & Microsoft
Azure for digital authentication, secure transactions, and legally binding signatures. 24
2.4.1 Land registration

Land tenure is a legal or customary regime which determines who can use land, for how long, and
under what conditions. Especially in developing countries, a large number of residential titleholders
lack accurate documentation of property ownership due to flawed paperwork, forged signatures and
defects in foreclosure and mortgage documents. In places where land tenure is more accurately
documented, the registries most commonly rely on paper-based documentation. Such documentation
is usually stored in a central location, making it vulnerable to loss, corruption or misuse. The loss or
manipulation of land documents creates social conflict and negatively affects the trust in governmental
services.
In the case of land registration, blockchain

"In the case of land registration, technology can increase the transparency of
blockchain technology can ownership changes reducing the possibility of
manipulation of existing titles. Similar to the
increase the transparency of registration process with a traditional land registry,
ownership changes reducing two citizens who have agreed on the sale of a
land parcel go to the governmental administrator
the possibility of manipulation responsible for transactions of land. As they sign
of existing titles." the sales contract, the administrator enters the
details of the transaction into a blockchain-pow-
ered land registry database. Now, the public
ledger will be provided with a privacy-shielded set of data. This would specifically entail a checksum
computationally generated based on the details of the new land title, i.e. the fingerprint or hash of the
full transaction. While the hash is captured and permanently stored on a blockchain, the full transac-
tion details are being stored privately. Once the transaction is computationally approved by the
network and added to the ledger, the transfer of ownership is immutably recorded and the blockchain
becomes a single point of truth. This prevents document forgery and corrupt land transfers. If there
21 Donahue, E., 2019. Microgrids: Applications, Solutions, Case Studies, and Demonstrations. In: M. Ghofrani, ed., Micro-grids:
Applications, Operation, Control and Protection. University of Washington Bothell. Available at: https://doi.org/10.5772/intechopen.83560
[Accessed 8 May 2020].
22 Tracking SDG 7 : The Energy Progress Report 2019, 2019. International Energy Agency; International Renewable Energy Agency;
United Nations Statistics Division; World Bank; World Health Organization, Washington, DC.
23 Brooklyn Microgrid, n.d. Brooklyn Microgrid | Community Powered Energy. Available at: https://www.brooklyn.energy/
24 See Reuters, 2020. Wisekey And Microsoft Collaborate To Support Rwandan Government Make Secure Transactions. Reuters. Avail-
able at: https://www.reuters.com/article/brief-wisekey-and-microsoft-collaborate/brief-wisekey-and-microsoft-collaborate-to-support-rwan-
dan-government-make-secure-transactions-idUSFWN1ML111 [Accessed 8 May 2020].
20
are doubts as to the validity of a land ownership claim, anybody can consult the public ledger for
validation. A smartphone app or web platform could be used as a user interface to that end.
This decentralised land registry adds value through its immutability and resilience. The fraud and cor-
ruption scenarios that rely on the forging or "disappearing" of documents, or attempts to sell land more
than once, are effectively discouraged by a timestamped hash on a public ledger. Once land titles
are appropriately digitised and secured using blockchain, this would especially benefit marginalised
groups in society, such as women or indigenous populations, who are often the victims of land fraud.
For this, however, a quality assured and safeguarded approach throughout the implementation phase
is required.
So far, Georgia has successfully implemented the use of blockchain technology for timestamping
digital land titles. Their National Agency of Public Registry has further decided to extend their exist-
ing project, enabling mobile phone-based land transactions in the long run, which could speed up
such processes to a matter of minutes. However, globally, there remains a long way to go as other
implementations remain in the pipeline, for example, in Sweden and Ghana. Especially countries with
competing systems or conflicted histories in the realm of land management, or countries without the
needed high-quality datasets and preceding digitalisation efforts, may find it difficult to move onto
implementation of a blockchain-based land registry.
• Book Chapter: Blockchain and Land Administration25

• Preprint: Digital Transformation: Blockchain and Land Titles26
• Concept Note: Land registries on a distributed ledger27
2.4.2 Verifiable digital education credentials

Across the globe, the future of work shifts the focus from manual labour to knowledge work. Individ-
uals now find themselves in a global labour market where it is key to differentiate oneself through a
unique, up-to-date and continuously progressing skill set. When previously an individual may have
undergone one-off training for a specific skill at a (physical) institution that has a reputation among a
local community, the new reality of life-long learning, micro certificates and the unbundling of educa-
tional programmes from various institutions worldwide leads to new challenges. To provide employers
or other administrations with an overview on a learner’s complex educational history, they would need
reliable information about a learner’s educational path. The promise of blockchain-based education
credentials is exactly that.
In order to increase trust in educational

certificates, blockchain-based systems
"Learners, educational institutions and can be used for the verification of digital
third parties will benefit equally from documents. This helps to re-establish
trust among employers and the global
forgery-proof certificates and reduced labour pool by limiting the forgery of
costs from efficiency gains." documents and increasing their recogni-
tion across national borders. The added
value of verifying digital documents
through a public blockchain is twofold. First, it lies in its reliability and robustness, resulting in an
extremely high degree of availability and trustworthiness of the information provided by the block-
chain-based verification process. Second, such a digital verification process with machine-readable
certificates is quick, fair and globally accessible. In comparison, manual verification processes may
involve time-consuming requests to issuing institutions and work flows prone to human error and
25 Makala, B. and Anand, A., 2018. Blockchain and Land Administration. In: UNOPS, ed., The Legal Aspects of Blockchain. The World
Bank. Available at: https://ideas.repec.org/b/wbk/wbpubs/31419.html [Accessed 8 May 2020].
26 Eder, G., 2019. Digital Transformation: Blockchain and Land Titles. In: OECD Global Anti-Corruption & Integrity Forum. Available at:
https://www.oecd.org/corruption/integrity-forum/academic-papers/Georg%20Eder-%20Blockchain%20-%20Ghana_verified.pdf [Accessed 8
May 2020].
27 v. Weizsäcker, F., Eggler, S. and Atarim, E., 2019. Land Registries On A Distributed Ledger. GIZ Blockchain Lab. Available at:
https://www.giz.de/en/downloads/giz2019-en-distributed-land-registry.pdf [Accessed 8 May 2020].
21
corruption. Ideally, learners, educational institutions and third parties will benefit equally from forg-
ery-proof certificates and reduced costs from efficiency gains.
There are three user groups in the blockchain-based credentialing systems:
1. Education providers such as universities or schools issue certificates as digital originals and
store so-called hashes of these files - which can also be called digital fingerprints - on a block-
chain.
2. Students receive their certificates in digital form and can pass them on to third parties or upload
them to professional online social networking platforms (such as LinkedIn) that are exploring auto-
matic verification of digital certificates.
3. Third parties such as employers or administrations can then validate the submitted certificates
electronically by comparing the document’s fingerprints with those stored on the blockchain. They
do not have to go through the cumbersome process of contacting the issuing institutions anymore.
Crucially, the technical infrastructure should be governed by a reputable consortium of institutions that
is deemed trustworthy, similarly to how trust and power is (explicitly or implicitly) present in today’s
educational systems. A key role of this consortium would be to authorise schools and other education-
al institutions to issue digital certificates with their credentials.
A few educational institutions around the world have already implemented blockchain-based educa-
tion credentials today. Standing out because of their open source approach are the software projects
OpenCerts from Singapore, and recently AUTHER (http://auther.org), which is based on Blockcerts
and widely-used standard OpenBadges. AUTHER has been developed by GIZ together with the
Southeast Asia Ministers of Education Organization SEAMEO INNOTECH and the Technische Univer-
sität Berlin, piloting how such an open system can work in practice.
• Concept Note: Blockchain-based education credentials28

• Whitepaper: Digitalisation of certificates with the support of blockchain technology29
• Whitepaper: Building the digital credential infrastructure for the future30
• Task Force: W3C Verifiable Credentials for Education31
28 v. Weizsäcker, F., Meier-Hahn, U. and Wannemacher, L., 2020. Blockchain-based education credentials. GIZ Blockchain Lab.
29 Netzwerk Digitale Nachweise, 2020. Digitalisation of certificates with the support of blockchain technology. Available at:
http://netzwerkdigitalenachweise.de/static/doc//Whitepaper_digitales_Zeugnis_en.pdf [Accessed 8 May 2020].
30 Digital Credentials Consortium, 2020. Building the digital credential infrastructure for the future. Digital Credentials Consortium.
Available at: https://digitalcredentials.mit.edu/wp-content/uploads/2020/02/white-paper-building-digital-credential-infrastructure-future.pdf
31 W3C, n.d. Verifiable Credentials For Education Task Force.Verifiable Credentials for Education Task Force. Available at:
https://github.com/w3c-ccg/vc-ed [Accessed 8 May 2020].
22
2.5 Tracing agricultural supply chains

Almost half the African population relies on agriculture for employment and food, and the percentage
can reach 70% in East Africa.32 Yet, the sector and the farmers are not delivering their full potential as
they are facing several issues such as the lack of access to financial resources and insurance, as well
as the complexity and opacity of supply and value chains.
Supply chains are intrinsically complex flows of goods, money and services. Their traceability refers
to the collection, documentation, and application of information related to all processes in the supply
chain in a manner that provides guarantee to the end-customer and other stakeholders along the sup-
ply chain on the provenance, location and life history of a product. It represents the ability to conduct a
full backward tracking to determine characteristics of the goods by means of records.
Often, the opaqueness of supply chains hinders customers from understanding the provenance of a
product, as well as its social and environmental impact for smallholder farmers and other participants
of the supply chain. While increasing numbers of customers seek out organically produced goods,
industry fails to provide such goods at a satisfactory standard. Currently, the only way for customers to
be promised higher standards is through certification schemes. These schemes tend to be too costly
for single smallholder farmers and even corporates may shy away from the investment. Hence, farm-
ers and workers may carry on receiving low prices for goods that could be distinguished as sustain-
ably sourced.
In blockchain technology, a token is a digital asset

"The traceability of transactions that is stored on the chain and can be connected to
a real-world value. Tokenisation in this context
enables higher transparency on allows to uniquely associate information to goods
and services of a certain time period. The advan-
how goods are being sourced, tage here is that every movement along the chain
processed and transported." will be recorded. The traceability of transactions
enables higher transparency on how goods are
being sourced, processed and transported as each
step along the chain of custody can be immutably recorded in real-time on a blockchain. This capacity
to shed light on the origins of consumer goods is one of the more promising attributes of blockchain
technology for local producers, logistical partners, and stakeholders along the supply chain. All
logistical information would be secured on-chain and all parties would trust this single source of truth.
Hypothetically, it could reward those using sustainable practices thanks to the increased price
consumers may be willing to pay based on more trust that has been created using a distributed
ledger.
However, there is no one-size-fits-all solution. Each supply chain has to be checked for its potential
to leverage distributed ledger technology. The capacity to run blockchain-powered supply chains will
largely rely on the willingness of all stakeholders involved and the ability to tokenise a traded good.
The more unique and identifiable the good is, the more its digital twin will faithfully reflect its attributes.
Unprocessed coconuts or pineapples for example are easier use cases for traceability as they can be
easily marked and traced - off-chain and on a blockchain.
Furthermore, a data model that everyone can access is crucial in this context to fully leverage the val-
ue chain cooperation. When opting for a distributed model, the governance itself needs to be equally
distributed and consensus on key aspects, including the technological setup and the data model ap-
plied, needs to be reached. Especially data quality and credibility have to be ensured. Individual data
of single actors that is not crucial for other actors along the chain should not be accessible. A good
balance between data transparency and privacy is required. Achieving good data quality is not part
of the blockchain technology solution. There are different ways to achieve this goal, one is internet of
things technology, where sensors monitor and record certain situations and environments. A second
32 NEPAD, 2013. Agriculture In Africa - Transformation And Outlook. NEPAD. Available at: https://www.nepad.org/file-download/download/
public/15582 [Accessed 8 May 2020].
23
approach is to diminish human error by educating and capacitating those handling the data, e.g.
through training courses, guidelines, handbooks or auditing structures.
• Report: Is there a role for blockchain in responsible supply chains?33

• Concept Note: Agricultural supply chain traceability34
2.6 Trade facilitation

Even today, 90% of international cargo is shipped by sea. Most commonly, for customs compliance,
the shipping industry relies on paper documentation. Advance cargo information may, for example,
only be transmitted 24 hours prior to a vessel arriving in the port, which leaves insufficient time for
customs. The extended transit times that result for shippers are costly and time-consuming.
To reduce these costs and inefficiencies, the application of blockchain is envisioned as a promising
use case. It would enable the exchange of information on international freight transports in real time.
Customs authorities could process customs declarations more quickly thanks to the information being
made available in advance. By using a blockchain-powered platform, all participants of the shipping
process are brought together and can view or edit their relevant shipping files based on individual per-
missions. The added trust of using blockchain in this scenario, improves collaboration and automation.
It also records all movements of the shipped goods simultaneously to the editions of documents and
documentation. Goods shipments can be processed immediately pre-arrival or pre-departure and then
released thanks to the availability of accurate and trusted documentation.
As an example: The German Alliance for Trade Facilitation is preparing a project together with Maersk
and UNCTAD to prove the possible reduction in time and cost of international maritime trade. Together
with customs authorities in the prospective pilot countries, Sri Lanka and Cambodia, the partners will
work on the data integration solution, ASYHUB, for the smooth exchange of data between UNCTAD’s
automated system for customs data (ASYCUDA) and blockchain-based applications, such as the
TradeLens data platform. Based on the experiences of the pilot countries, the approach is going to be
scaled up in five more countries within the project and eventually all ASYCUDA using countries. This
provides several opportunities for African countries with sea ports, for example, Togo, Côte d’Ivoire,
and many others.
The global TradeLens platform already accounts for 20% of global freight ocean traffic, while ASYCU-
DA is used in over 60 countries. This evidences the potential for global scaling.
• White paper: Overview of Blockchain for Trade35

• Working paper: Can Blockchain Technology Facilitate International Trade?36
33 Tholen, D., de Vries, A., Daluz, A., Antonovici, C., van Brug, W., Abelson, R., Lovell, D., 2020. Is There A Role For Blockchain In Re-
sponsible Supply Chains?. OECD. Available at: http://mneguidelines.oecd.org/Is-there-a-role-for-blockchain-in-responsible-supply-chains.
pdf [Accessed 8 May 2020].
34 Wannemacher, L. and Mehrländer, A., 2020. Agricultural supply chain traceability. GIZ Blockchain Lab. Available at: https://www.giz.de/
en/downloads/giz2020-en-agricultural-supply-chain-traceability.pdf [Accessed 8 May 2020].
35 UNECE, 2019. Blockchain For Trade Facilitation. Available at: https://unctad.org/meetings/en/Presentation/cimem7p16_Lance%20
Thompson_en.pdf [Accessed 8 May 2020].
36 McDaniel, C. and C. Norberg, H., 2019. Can Blockchain Technology Facilitate International Trade?. Mercatus Research. Mercatus Center
at George Mason University. Available at: https://www.mercatus.org/system/files/mcdaniel-blockchain-trade-mercatus-research-v2.pdf
24
3. POLICY CONSIDERATIONS
The versatility of blockchain technology across the range of use cases outlined in the previous chapter
comes with its own caveats. For each use case, it is not only a question of how to design a techno-
logical system, but also one of how to embed the technology in the legal and political environment.
Existing policies need to be established or updat-

ed in the context of blockchain technology and the
"It is not only a question of necessary regulatory mechanisms need to be put in
how to design a technological place. The role and uptake of African governments
will be important, both from an adoption perspective,
system, but also one of how to as well as with regard to the creation and enable-
embed the technology in the ment of the policy and regulatory environment.
legal and political environment." This section presents policy choices to be consid-
ered by African decision and policy makers when
designing the legal or political environment, includ-
ing data privacy and financial regulations. It will look at the tensions between data protection and
blockchain, at the technology’s link to financial regulation and it will give examples of existing national
strategies that regulate and - at times - promote blockchain technology.
3.1 Blockchain technology and data protection

The possible tension between blockchain technology and data protection regulation arises from the
fact that both regulation, organisational implementation and technology determine social choices that
in every-day life would be made rather context-driven. These determinations can be in conflict with
each other. Blockchain technology can be at tension with several themes that are central issues in
data protection, including
• objectives chosen by the legislator,

• "secrecy" versus "transparency",
• "remembering" versus "forgetting" (or a "right to be forgotten"),
• updates and corrections of data,
• data subjects’ rights, and
• regulatory oversight and enforcement.
Blockchain-based systems are neither generally compatible nor generally incompatible with these
dimensions of data protection. Therefore, this chapter foregrounds how different positions on each of
these matters may inform both technology design and policy action.
25
Focus Box:
Status quo of pan-African data protection initiatives and harmonisation efforts
The current considerations of blockchain technology fit into overarching efforts to harmonise data
protection across the African continent. Such a harmonisation of data protection regimes rather needs
to be understood as a negotiated compromise instead of shared values. An example for this is the
EU’s General Data Protection Regulation. Despite it serving as a possible inspiration in terms of legal
methodology, the Regulation does not suffice as a direct import to establish Africa’s data protection
framework for that would anticipate the yet to find African compromise.
Today, several initiatives for the harmonisation of data protection laws coexist. Over the last fifteen
years, some regional frameworks have been developed, such as the 2008 East African Community
Framework for Cyberlaws, the 2010 Supplementary Act on Personal Data Protection of the Economic
Community of West African States, or the 2013 Southern African Development Community model law
harmonising policies for the ICT Market in sub-Saharan Africa. In 2014, the first pan-African frame-
work was adopted with the African Union Convention on Cyber Security and Personal Data Protection
(Malabo Convention). The Malabo Convention’s pace of ratification and adoption is still slow.
Almost 6 years after the Convention was signed, out of the 54 African countries, only 29 indeed do
have data protection legislation (see figure on state of data protection regulation in Africa). While an
increasing number of governments are planning to adopt such a framework, this situation creates un-
certainty for many businesses that plan to develop digital products and services in Africa, in particular
when these services require cross-border data transfers (see figure on the state of cross-border data
flows regulation in Africa).
The harmonisation of the legal frameworks for the collection and processing of data in Africa still fac-
es various obstacles:
• significant cultural and legal diversity across the continent, with different expectations regarding
the good that shall be protected, such as privacy, fairness, dignity or fundamental rights and free-
doms at large.
• variations in access to technology and online services among African states
• different levels of capability in the fields of technology and technology-related law and
governance 37
As part of the current efforts towards a harmonised framework, Smart Africa has launched a work-
ing group to support member states that want to develop data protection and policy strategies. The
current situation poses an opportunity to form a digital single market in Africa. The working group will
therefore also propose monitoring and support mechanisms for the harmonisation and adoption of
data protection frameworks.
The international harmonisation of laws can, however, only be considered a first step. One of the ma-
jor issues governments are facing today is the mismatch between existing regulatory frameworks and
their enforcement. Enforcement depends on the existence of an independent administrative authority
with a clear mandate and sufficient resources. In addition, enforcement and compliance depend on
the level of awareness on privacy rules in both the public and private sectors and among citizens.
The enforcement of data protection frameworks will require important efforts on capacity building and
educational programmes for data protection authorities. This applies in particular to the context of
emerging technologies like blockchain which require a high level of expertise for regulators. A pan-Af-
rican approach should be adopted here as well, in order to mutualise expertise and scarce resourc-
es, and to ensure harmonisation not only of national legal frameworks but of the specific implementa-
tion strategies countries adopt. The role of pan-African organisations, like the African Data Protection
Network (Réseau Africain sur la Protection des Données, RAPDP) will be crucial to this end.
37 Internet Society and African Union, 2018. Personal Data Protection Guidelines For Africa - A Joint Initiative Of The Internet Society And
The Commission Of The African Union. Internet Society and African Union. Available at: https://www.internetsociety.org/wp-content/up-
loads/2018/05/AUCPrivacyGuidelines_2018508_EN.pdf [Accessed 8 May a].
26
State
DPA of
LAW data protection regulation in Africa State of cross-border data flows regulation in Africa
cross-border data flows
29 countries do have speci- 9 countries are currently Cross-border data flows

fic data protection laws drafting legislation require contractual No prior restriction: Absence of cross-
safeguards, prior aut- ex-post accountability border
Algeria Cameroon horization or adequacy for data exporters data flow restrictions
decisions by authorities. (2 countries) (26 countries)
Angola Egypt
(26 countries)
Benin Eswatini
Algeria
Botswana Gambia Angola
Burkina Faso Malawi Benin
Cabo Verde Namibia Botswana
Burkina Faso
Chad Rwanda
Burundi
Tanzania,
Côte d'Ivoire Cabo Verde
United Republic
Cameroon
Equatorial Guinea Zimbabwe
Central African Republic
Gabon Chad
Ghana Comoros
Guinea Côte d'Ivoire
Democratic Republic
Kenya
of the Congo
Lesotho Djibouti
Madagascar Egypt
Mali Equatorial Guinea
Eritrea
Mauritania
Eswatini
Mauritius Ethiopia
Morocco Gabon
Niger Gambia
Ghana
Nigeria
Guinea
São Tomé and Príncipe Guinea-Bissau
Senegal Kenya
Seychelles Lesotho
Liberia
South Africa
Libya
Togo Madagascar
Tunisia Malawi
Uganda Mali
Mauritania
Zambia
Mauritius
The remaining countries do not have any Morocco
specific data protection law.
Mozambique
Namibia
Figure 4: State of data protection regulation in Africa Niger
Nigeria
Republic of the Congo
Rwanda
São Tomé and Príncipe
Senegal
Seychelles
Sierra Leone
Somalia
South Africa
South Sudan
Sudan
Tanzania,
United Republic
Togo
Tunisia
Uganda
Zambia
Zimbabwe
Figure 5: State of cross-border data flows regulation in Africa

27
3.1.1 From regulatory goals to legal techniques

Arguably, the particular regulatory approach is of less importance for ensuring harmonisation across
Africa than finding a consensus on the regulatory goals. The specific provisions in the applicable data
protection laws determine whether and how blockchain technology may be used in compliance with
the law, and how laws must be designed to ensure that compliance is possible. However, African
states should continue to develop and negotiate their positions on the different objectives first, and
then debate which regulatory approach should be implemented to ensure that these goals are met.
Three basic approaches [see Figure 4] to regulating modern information processing can be distin-
guished that foster its positive and mitigate its negative implications:
• The rights-based approach: It is followed by many francophone countries and conveys rights to
data subjects. These rights must then be safeguarded by data controllers and processors. Supervi-
sory authorities come in to bear part of the burden of the individual.
• The duty-based approach: It is more common in anglophone countries and stipulates objective re-
quirements and duties for data controllers and processors. The role of supervisory authorities in this
approach is to complement the controllers’ and processors’ self-monitoring by external supervision.
• Mixed approach: Mutual reinforcement of individuals (who prompt enforcement of their rights) and
processors who have to guarantee certain safeguards.
While these three approaches apply different means, they can all achieve the same regulatory out-
come by setting similar standards to which information collection, processing and use has to adhere.
Rights-based and duty-based approach in practice
Imagine a scenario in which the operator of an e-commerce shop (the data controller) should provide
information about the processing of personal data to the customer (the data subject): a rights-based
approach would grant a right to request this information to the customer; a duty-based approach
would require the shop operator to proactively inform its customers; and a mixed approach would
include two separate provisions, one granting the right to request information to the customer and
one imposing the duty to inform the customer onto the shop operator. Enforcement mechanisms to a)
uphold the rights of the customer in the rights-based approach and/or to b) monitor the controller’s
compliance with his duties in the duty-based approach either follow existing legal procedures, such
as sending a warning letter, filing a lawsuit or initiating supervisory procedures, or must be newly
created.
"The particular regulatory approach is of less importance for

ensuring harmonisation across Africa than finding a consensus
on the regulatory goals."
28
Figure 6: Mutual reinforcement of rights and duties in a mixed approach
The pan-African harmonisation therefore essentially requires a negotiation of the desired regulatory
outcomes. Such a directive - formally comparable to the EU’s legal framework - would provide for a
consented regulatory goal as well as general guidelines. It would further permit national characteris-
tics in the directive’s implementation in the Member States. In their own laws, Member States could
include a provision that considers the laws of those other Member States equivalent who implement
the same directive. This results in a mutual recognition of adequate levels of protection. The directive
in combination with each member state’s laws are thus a multilateral form of well-known bilateral ar-
rangements of mutual recognition, such as the EU-U.S. Privacy Shield or double taxation agreements.
3.1.2 Legal design choices to operationalise data protection

objectives for blockchain technology
A coherent process for designing data protection
law with an eye for blockchain would start with
"Various regulatory means can finding consensus on the law’s objective(s). This
serve to realise selected involves carefully selecting and defining the
protected goods. These could e.g. be "privacy",
objectives; while means can "fairness", "personality rights", "dignity", "the
have unintended effects beyond individual", or "fundamental rights and free-
doms".38 It is important to note that these concepts
the intended outcomes." are only similar at first sight. In fact, the very
selection of the protected good has consequences
for the next steps. These include framing risks, choosing legal means to safeguard against these risks
and foreseeing the particular forms and implementations of blockchain technology that the law
enables or impedes. Oftentimes, there are various regulatory means to realise selected objectives and
means can have unintended effects beyond the intended outcomes.
With a view to blockchain technology, both regulatory means and objectives may create tension be-
tween the technology’s design and data protection regulation, in areas such as:
• Secrecy versus transparency;

• Forgetting versus remembering;
• Updates and corrections of data
• The different roles of data subjects’ rights.
In order to avoid possible tensions between blockchain technology and data protection regulation,
several elements, described below, shall be included in design provisions for all data protection laws
for blockchain technology to strive.
38 There is no consensus either on the concept of "privacy", see Mulligan, D. K.; Koopman, C. & Doty, N. (2016), Privacy is an essentially
contested concept: a multi-dimensional analytic for mapping privacy. In: Philosophical Transactions of the Royal Society of London A: Math-
ematical, Physical and Engineering Sciences, p. 374.
29
Secrecy versus transparency
Every legal system has developed its own differentiated way of treating particular issues, events,
practices and activities as secret, confidential, open or transparent. These differentiations reflect so-
cial and national history, past and present experiences as well as cultural and political values. In many
cases, neither secrecy, confidentiality, openness nor transparency are meant to be an end in itself,
but a means for achieving other ends.39 The following design choices have to be made in blockchain
systems.
• General transparency rules out selective disclosure. Only if particular information is generally
kept confidential, it can be made available to particular persons, groups or organisations on a case-
by-case basis, e.g. after examining their legitimate interest or for specific purposes only.40 Confiden-
tiality thus serves the end of making information selectively available. The use of a public blockchain
would impede the regulator’s ability to selectively disclose information, as it would be generally
transparent.
• Decentralisation can serve as a technical measure to safeguard transparency. Some infor-

mation might not only be made public as such, but in a sustainable way. For example, information
made public in a very decentralised manner, impedes or defies attempts to monopolise the informa-
tion or withdraw it from the public eye.
• Blockchain systems present new ways to access information and require new digital literacy.
Distributed ledger technologies may create obstacles for those lacking particular technical means
or skills, especially if applied to public information, this may widen the digital divide. Conversely,
presenting information through the form of blockchain may also allow for completely new levels
of access, e.g. through applying computational methods of analysis that were not possible on the
datasets before.
As exemplified above, the application of DLT may challenge traditional structures and values regard-
ing different forms of secrecy and transparency. It may, in fact, negate the very purposes they are
intended to serve if introduced without considering the consequences. Putting information directly on a
public blockchain, e.g. financial transactions as in the case of the Bitcoin blockchain, would make hith-
erto confidential data open to everyone. Putting previously public information on a private blockchain
would make them inaccessible for the general public. The sudden transparency of formerly secret or
confidential data may introduce unintended consequences, such as exposing individuals’ financial,
health, educational or application data to blackmailing, extortion or scams, or exposing journalists to
parties whom they are investigating if their freedom of information requests are made public. In addi-
tion, it may undermine the purpose formerly served by secrecy or confidentiality.
Like every other form of digitalisation, the application of blockchains may create new kinds of meta-
data, with public blockchains also making these widely available. This could lead to unintentionally
exposing individuals within organisations, who are merely tasked with appending information to the
ledger. This new deluge of metadata will allow for new forms of data analysis and possibly surveil-
lance.
To prevent unintended consequences, decisions on treating particular issues, events, practices, activ-
ities as secret, confidential, open or transparent should rest with the political decision-maker. Block-
chain-based systems should then be designed, implemented and used according to these decisions,
and not the other way around.
39 For example, both the traditional openness of individual and corporate tax returns in Northern European countries and the equally tradi-
tional confidentiality of tax returns in Central European countries serve the same purpose: maximising the state’s tax revenue. In the former
case, the tax returns’ openness allows for members of a community to monitor the tax honesty of their fellow community members, while
in the latter case, the state promises to keep tax returns confidential if and only if they are submitted exhaustively and honestly covering all
tax-related issues. Thus, tax return openness and confidentiality are means for the same purpose, with each state’s choice of the former or
the latter being historically contingent, originating from a particular value system at the time of its introduction, and forming and reinforcing
the value systems of today.
40 For example, in Germany residential registration data is generally confidential, but upon request, political parties are given access to this
data to distribute election campaign information.
30
Forgetting versus remembering
Societies have developed different cultural, legal and institutional answers on how to cope with re-
membering and forgetting beyond the sphere of the individual and community memory. For example,
forgetting is deeply enshrined in American culture as a society originating primarily from immigrants
leaving their former home countries to start a new life in the New World, a culture that was reinforced
over centuries with people moving westwards, leaving behind their old lives and starting anew some-
where in the West. While historically very different, Germany, for example, introduced a legislation
to erase past criminal records with an eradication period of 5, 10, 15 or 20 years depending on the
amount of the penalty as long as no new criminal offenses have been committed. This can be regard-
ed as a form of "institutional forgetting". A similar approach has been taken by many truth commis-
sions in the historical reappraisal of states’ and collectives’ dictatorships, crimes or civil wars. These
societies’ particular histories have strongly shaped their individual - and often highly political - ap-
proaches to remembering and forgetting, which have then been implemented in data protection laws,
e.g. the "right to be forgotten" enshrined in Article 17 of the EU General Data Protection Regulation.
Distributed ledger technologies pose severe challenges to differentiated approaches to remembering

and forgetting, e.g. regarding different parts of a record, changes over time, or the different treatment
of different social actors. So, these - sometimes politically delicate - social agreements might be put
under serious pressure. It is thus of vital importance to build a consensus in society regarding the
treatment of collective and institutional memory and the consequences it entails, before rashly imple-
menting DLT.
Updates and corrections of data
All data protection laws require data to be correct and kept up to date. This requirement poses severe
challenges for the application of distributed ledger technologies, such as blockchains. With distribut-
ed ledgers, it is essentially impossible to correct false or update outdated information stored on the
blockchain. Instead, blockchain technology only allows for adding new information to the (end of the)
blockchain. Thus, every blockchain will show its entire history of entries, including those that were
found incorrect, invalid, misleading or outdated. Anyone, including the data subjects, are only able to
flag or revoke, but not to permanently remove such entries.
While this issue of the non-modifiability is

related to remembering and forgetting, it
"With distributed ledgers, it is also raises its own distinct challenges. Not
essentially impossible to correct only does it expose every clerical error to
the public, but it might pose severe chal-
false or update outdated information lenges to every user of the blockchain. If a
stored on the blockchain." blockchain contains millions or billions of
entries, users may be unable to ensure they
have obtained the latest and correct
information from the ledger. For example,
the Bitcoin blockchain’s total size has reached an astonishing 262 gigabytes in February 2020. Thus,
the proliferation of distributed ledgers and their application in an ever increasing range of fields may
lead to a situation where the ability of public administration, private businesses, civil society and
individuals to make informed decisions based on valid, correct and up-to-date information may be
severely hampered by the challenges of retrieving such data from distributed ledgers at reasonable
transaction costs or at all. This may create negative consequences for those that depend on these
actors’ decisions, such as citizens, customers, patients or students. While this particular problem may
be solved by centralising the blockchain, the very centralisation undermines many of the advantages
of a decentralised or distributed system, such as its greater scalability, availability, resilience and fault
tolerance.
31
The different roles of data subjects’ rights
Data protection laws usually confer rights to the individual whose data is being processed, the data
subject. These rights can be of different character: they may be ends in themselves, they may be
means serving other ends, or both.
• Data subjects’ rights as ends in themselves - typical for rights-based regulatory regimes:
Data subject’s rights are then concretisations of the more general rights that the law aims to protect,
e.g. privacy or fundamental rights and freedoms. They are meant to guide the design, implementa-
tion and practices of information processing.
• Data subject’s rights as means to serve

other ends - typical for duty-based regulato- "It is thus highly recommended
ry regimes: By conferring rights to individuals, to establish 'data protection by
these individuals are turned into stakeholders
of their own that would help to enforce the design' provisions in all data
provisions of the law out of their own, though protection laws."
conferred, interests.
The EU General Data Protection Regulation is an example of combining both. The rights conferred
are ends in themselves, which directly bind controllers and processors. They aim to guide the imple-
mentation of appropriate technical and organisational measures in order to protect these rights ("data
Individual Choice v2 protection by design", Article
State of data subject rights in data regulations in Africa 25). They are, however, also
means to facilitate the detec-
28 countries grant 27 countries grant 20 countries grant tion of data protection breach-
the right to access the right to access the right to access, es and the enforcement of the
personal data and rectify personal rectify and erase Regulation by distributing the
data personal data
power to question and control
97% of countries 93% of countries 69% of countries the controllers’ data process-
with data protection with data protection with data protections ing practices.
laws laws laws
Algeria ● ●● In the EU regulation, subjects’
Angola ● ●● ●●● rights may include the right
Benin ● ●● ●●●
of information about the data
Botswana ● ●●
that is held about them, the
Burkina Faso ● ●●
right to access these data, the
Cabo Verde ● ●● ●●●
● ●● ●●●
right to rectification, the right
Chad
● ●● ●●● to erasure - sometimes called
Côte d'Ivoire
Equatorial Guinea ● ●● ●●● the "right to be forgotten" -, the
Gabon ● ●● ●●● right to restriction of process-
Ghana ● ●● ing, the right to object, whether
Guinea ● ●● ●●● in general or to the sale of
Kenya ● ●● ●●● personal data, and the right to
Lesotho ● ●● ●●● data portability.
Madagascar ● ●●
Mali ● ●● ●●● These rights generally pose
Mauritania ● ●● ●●●
similar challenges regarding
Mauritius ● ●●
the use of blockchain technol-
Morocco ● ●●
ogy to the respective duties:
Niger ● ●● ●●●
● ●● ●●●
the right to rectification consti-
Nigeria
São Tomé and Príncipe ● tutes similar challenges to the
Senegal ● ●● ●●● duty to keep data correct and
Seychelles ● ●● ●●● up-to-date, the right to erasure
South Africa ● ●● ●●● to the duty to delete personal
Togo ● ●● ●●● data not necessary anymore
Tunisia ● ●● ●●● for the purposes for which it
Uganda ● ●● ●●● was collected, etc.
Figure 7: State of data subject rights in data regulations in Africa
32
Other data subjects’ rights in the EU regulation, such as the right of information, the right to access,
the right to restriction of processing or the right to data portability, pose no particular challenges to
blockchain technology if it is designed, implemented and used in an appropriate manner to safeguard
these rights.
It is thus highly recommended to establish "data protection by design" provisions in all data protection
laws that require companies and other public and private organisations to implement technical and
organisational measures at the earliest stages of the design of the processing operations, in such a
way that safeguards data protection principles and data subjects’ rights right from the start (see figure
on state of data subject rights in data protection regulations in Africa).
DPA enforcement v2
3.1.3 Supervisory authorities State of data protection law enforcement in Africa
and enforcement in the face of 29 countries with

14 countries with
established and
blockchain technology legal existence
of a data protection
active data protec-
tion authority with a
authority
clear mandate and
Independent of a particular data protection resources
law following a rights-based or a duty-based
100% of countries 58% of countries
approach, supervisory authorities play a major with data protection with data protection
role in all data protection regulations. Supervi- laws laws
sory authorities complement data subjects in Algeria ●
enforcing their rights in rights-based regimes,
they add external monitoring to the controllers’
Angola ●
self-monitoring in duty-based regimes, and they Benin ● ●
do both in mixed-data-protection regimes (see Botswana ● ●
figure on state of data protection law enforce- Burkina Faso ●
ment in Africa).
Cabo Verde ● ●
Their tasks include, among others, Chad ●
Côte d'Ivoire ● ●
• to monitor the application of the law, Equatorial Guinea ●
• to advise data subjects on their rights, data Gabon ● ●
controllers on their duties as well as gov-
ernments and legislators on legislative and
Ghana ● ●
administrative measures, Guinea ●
• to create guidelines and collect best practic- Kenya ●
es and disseminate both to all stakeholders, Lesotho ●
• to handle complaints lodged by data subjects Madagascar ●
and other stakeholders and investigate the
subject matter of the complaint, Mali ● ●
• to conduct investigations on the application Mauritania ●
of the law, including audits, issue warnings Mauritius ● ●
and reprimands, and impose administrative Morocco ● ●
fines, and
• to monitor relevant developments regarding
Niger ● ●
information processing technologies and prac- Nigeria ● ●
tices that have an impact on data protection. São Tomé and
Príncipe ● ●
Senegal ● ●
Seychelles ●
South Africa ●
Togo ●
Tunisia ● ●
Uganda ●
Zambia ●
Figure 8: State of data protection law enforcement in Africa
33
In order to be able to fulfil their complex

"Regulation must ensure that tasks regulation must ensure that supervi-
sory authorities’ staff has adequate
supervisory authorities' staff has qualifications, experience and skills and the
adequate qualifications, experience, authorities are provided with the necessary
human, technical and financial resources,
skills and resources." premises and infrastructure. To strengthen
the pan-African harmonisation and enforce-
ment of data protection and to allow the
free flow of information, it is further recommended to establish provisions that enable and mandate
supervisory authorities to cooperate with other supervisory authorities across Africa and beyond.
These authorities need to be provided with the necessary resources to fulfil these tasks, which also
includes the sharing of information and mutual assistance.
3.2 Financial regulation: considerations for distributed

ledger technology applications in finance
Whenever blockchain (or DLT) systems are applied for the conduct of financial services, the service
provider is subject to financial regulations of the jurisdiction it is operating in. Depending on the type of
the service provided, or the activity carried out, disclosure, licensing or other requirements may apply.
These might range from
• reliability checks for owners/shareholders as well as management of financial services,

• to solvency and liquidity rules and risk and compliance management requirements that traditionally
apply for financial service providers,
• to consumer protection and security (market conduct) rules that also apply for non-bank financial
service providers,
• to specific disclosure regimes, like prospectuses and/or filings.
The application of rules is context-specific and best identified in coordination with the financial regula-
tory authority of the concerned jurisdiction.
Traditional crypto-assets, i.e. the type of permissionless (public) tokens (e.g. Bitcoin), typically claim
to not be governed by any particular party. Therefore, their issuance is difficult to regulate. During the
hype of initial coin offerings, many tokens which fall under the securities regulations of various jurisdic-
tions have been issued and publicly sold. All of those tokens have attracted the attention of financial
policymakers and regulators internationally due to implications on the integrity and stability of the
financial system.41 Regulators are especially concerned about issues around consumer and investor
protection (due to little or inadequate disclosure of risks involved in the acquisition of tokens) and the
use of crypto-assets to cover up illicit activities, such as money laundering, terrorist financing, bribery,
corruption or fraud. Such illicit financial flows are increasing, and DLT have become known as means
of facilitating them. At the same time, the Financial Stability Board42 emphasises that the technologies’
underlying crypto-assets "have the potential to improve the efficiency and inclusiveness of both the
financial system and the economy".
With the increasing use of crypto-assets globally, global standards and national regulations for finan-
cial integrity have become a key issue.43 In October 2018 and June 2019 the Financial Action Task
Force (FATF) moved on to update its standards (mainly the Recommendation 15) in order to clarify
the application of anti-money laundering (AML) and counter terrorist financing (CFT) requirements
on what it calls "virtual assets" and "virtual asset service providers," i.e. crypto-asset exchanges and
wallet providers, in view of addressing the threat posed by illicit financial flows through crypto-assets
41 See Financial Stability Board, 2018. To G20 Finance Ministers And Central Bank Governors. Financial Stability Board. Available at:
https://www.fsb.org/wp-content/uploads/P180318.pdf [Accessed 8 May 2020] and Financial Stability Board, 2018. Crypto-Assets: Report
To The G20 On Work By The FSB And Standard-Setting Bodies. Financial Stability Board. Available at: https://www.fsb.org/wp-content/up-
loads/P160718-1.pdf [Accessed 8 May 2020].
42 The FSB is an international body that coordinates the work of national financial regulatory authorities.
43 The FSB thus calls for further international coordination and more engagement by standard-setting bodies such as the (Committee on
Payments and Market Infrastructures) CPMI, International Organization of Securities Commission (IOSCO) and the Basel Committee on
Banking Supervision (BCBS).
34
to the integrity of financial systems. The updates include obligations for risk mitigation as well as for
licensing and registration of such providers.44, 45
The FATF Recommendations are meaningful both to its member states and to non-members.
Non-member states that do not follow the FATF standards have to expect sanctions, which make it
more complicated to conduct international payments. Additionally, the existence of global standards
for crypto-assets will increase the pressure on non-member states to position themselves vis-à-vis
such new, interconnected global payment infrastructures. An effect of the FATF Recommendations is
that they practically introduce a demarcation between two regimes: the compliant blockchain world
and the non-compliant blockchain world. Outcomes of such an approach can be seen in Switzerland
where compliant service providers are prohibited from doing business with non-compliant systems.
A seamless transition is apparently not desired and is becoming increasingly difficult. This may be a
relevant message for African countries that already struggle with cross-border financial transactions:
virtual asset service providers are supposed to require a license or at least be registered publicly.
Additionally, the so called travel rule is extended to the transfer of virtual assets, which means that
virtual asset service providers need to obtain, hold and submit to the beneficiary virtual asset service
provider information on the originating as well as beneficiary wallet account that are parties to a given
transfer. Moreover, they must implement measures to monitor, freeze and prohibit transactions.
These requirements assume a central service provider and the industry initiated certain working
groups to deliver technical solutions satisfying the FATF recommendations. However, it remains to
be seen how FATF deals with truly decentralised tools. For the African continent, the so-called FATF
regional communities help with implementation and channel feedback to the main organisation.
The NGO Alliance for Financial Inclusion (https://www.afi-global.org/) additionally supports central
banks and regulators in developing and emerging economies in their dialogue with FATF.
In addition to the public money laundering and terrorism financing monitoring needs, protecting
investors by providing for a proper disclosure regime (especially prospectus requirements for public
securities offerings) and protecting customers of finacial servicing offerings (like payment services,
investment advice, custody of finanical assets) are core topics for financial regulatory regimes.
44 FATF, 2019. Public Statement On Virtual Assets And Related Providers. FATF. Available at: https://www.fatf-gafi.org/publications/
fatfrecommendations/documents/public-statement-virtual-assets.html [Accessed 8 May 2020].)
45 For a legal interpretation see: DWF, 2019. DWF Spotlight: FATF Recommends Regulating And Monitoring Virtual Asset Service Providers.
DWF. Available at: https://www.dwf.law/Legal-Insights/2019/August/Regulation-of-virtual-asset-service-providers [Accessed 8 May 2020].
35
Focus box: A blockchain-powered KYC layer for financial services

and international trade
Much attention has been given to the ambivalent relationship between public blockchain architec-
tures and the enforcement of KYC rules, which are critical means against AML and CFT. However,
blockchain technology itself could also be used to address shortcomings of current KYC gover-
nance. Existing platforms for customer due diligence (CDD) in trade finance are known to not be very
effective. Among the reasons are that existing KYC repositories lack focus on developing markets
or that they focus on commercial banks only, but not on corporates and small and medium enter-
prises (SME). Beyond that, high subscription cost discourages financial institutions and entities from
connecting with these platforms. As a result, KYC concerns still rank highest among the reasons for
rejected transactions in trade finance.
Easing KYC has been identified as a lever to increase financial inclusion, foster innovation and drive
competition in financial services long before blockchain. Now, the idea is gaining track to use block-
chain technology in favour of KYC. Blockchain technology could offer the infrastructure to power a
trustworthy KYC layer for financial services (sometimes referred to as collaborative CDD). As a dis-
tributed, digital repository, this KYC layer would facilitate the sharing of authoritative KYC information.
It could provide a single source of primary data required to conduct CDD checks on counterparties.
Information would be independently verified prior to publishing on the repository. In addition to the
host of such a blockchain-powered CDD platform, regulators could participate by verifying logged
information. This way, information could be collated for KYC checks in line with globally recommend-
ed standards (such as FATF). Financial institutions, SME and corporate entities would upload their
information on the repository using standardized KYC/AML templates.
Market participants would benefit from "one stop access" to KYC/CDD information. This would ease
onboarding of customers, increase efficiencies and reduce regulatory risk. African economies could
benefit from consistent CDD information for various entities on the continent.
3.3 Existing national blockchain strategies under review

Governments around the globe have devised blockchain strategies as instruments to deal with this
new technology in terms of policy, oftentimes acknowledging the short half-life of any digital strategy.
Cursory research identified more than a dozen explicit national blockchain strategies or strategy-re-
sembling documents that have been published within the last three years.46 Without claiming a sys-
tematic review - partially due to language barriers - this chapter presents common elements in these
strategies and highlights different policy approaches towards a blockchain-enabled future, occasion-
ally pointing out forks in the road that could lead to very different outcomes for the global blockchain
ecosystem.
46 See Appendix A.
36
3.3.1 Between promoting innovation and preventing crime

A recurring theme in all blockchain strategies under review is that they address the tension between
promoting innovation and preventing crime. Governments want to be frontrunners in blockchain tech-
nology by enabling legislative frameworks for innovation and growth. They attempt to "lead by being
proactive, open to business, attracting entrepreneurs and investors from all over the world" (Malta),
provide "possibilities for field testing under real-world conditions" (Germany) or, be home to "interna-
tional blockchain collaborations" (The Netherlands). At the same time, the strategies reflect that global
concerns are rising with regard to money laundering, terrorism financing, bribery, corruption, fraud and
other activities of financial crime. Blockchain technology has been associated ingloriously with such
crimes, precisely due to the architectural properties that make blockchain an enabling technology
for digital innovation, e.g. its distributed nature and cryptographic methods. This poses challenges to
technology governance.
In the financial sector, regulatory goals of

promoting innovation on the one hand and
"A recurring theme in all preventing crime on the other appear most
blockchain strategies under difficult to unite. This is because innovation in
distributed ledger ecosystems requires open-
review is that they address the ness, while preventing crime tends to relate to
tension between promoting oversight mechanisms that are difficult to
innovation and preventing crime." maintain in an extremely open environment.
With this in mind, several governments plan to
amend legislative frameworks relating to
financial policy. Germany plans to allow digital
securities. Australia wants to remove double taxation of Goods and Services Tax in the context of
digital currency, effectively mandating taxation only when purchasing goods with digital currency, but
abolishing taxation when acquiring digital currency. It further explores the possibility of using block-
chain as a utility for sharing KYC information [see focus box A Blockchain-powered KYC-layer]. This
could enhance competition in the financial sector, because it would alleviate an existing bottleneck-sit-
uation.47 Hopes are high that using blockchain as a common KYC-layer could foster transferable KYC
checks, thereby lowering switching rates, driving down fees in the banking sector and simplifying
complex interest structures. As other strategies note, KYC-sharing could effectively complement
national efforts to improve and foster ID services at large (Bangladesh).
At the same time, many governments see the need to close regulatory gaps (taxation, data protection)
and create safeguards against the abuse of blockchain technology, e.g. to prevent corruption and
crime and to protect consumers. One of the focus areas are initial coin offerings. Germany is con-
sidering to condition the publication of such crypto-tokens on the disclosure of baseline information
that has been reviewed by the financial authority. Other governments focus on avoiding tax evasion
through cryptocurrencies. The idea is to create taxation regimes for transactions that involve business
activities in cryptocurrencies (Australia, Cyprus). This could imply treating token transactions the same
as transactions with fiat currency per the Income Tax Law and consider block rewards to blockchain
miners as ordinary income (Cyprus). Another set of measures concerns AML law. The FATF, which is
a de facto standardisation body in this field, has adopted an interpretive note to its recommendations
on distributed ledger services in June 2019. Some of the more recent blockchain strategies pledge
to comply with the FATF and focus on regulating so-called virtual asset service providers, who act as
intermediaries in blockchain ecosystems [see chapter Financial regulation].
47 Currently, every provider of financial services is tasked with securing identification of new customers independently.
37
3.3.2 Capacity building and research

While sharing a sense of excitement about the still nascent distributed ledger technologies, most
strategies emphasise the necessity to allocate funding to research, capacity building and knowledge
transfer (Kenya, India, Bangladesh, Australia, Germany, France, Netherlands). It appears noteworthy
that several strategies (France, Australia, Netherlands) explicitly recommend research approaches
that are both interdisciplinary and applied. Here, research should involve both social and computer
sciences and it should include students, universities and companies - especially SMEs - alike. This
shows policy makers’ matured view on blockchain as a contextualised technology with on-chain and
off-chain governance aspects in comparison to the previously isolated focus on technology develop-
ment. Several strategies reflect that the feasibility of blockchain-based applications very much de-
pends on institutional, regulatory and ecosystem context. Governments further see the need to quickly
educate both professionals and students about blockchain technology in order to build a professional
skill base, also in native languages. This shall serve to satisfy in-country demand for expertise, includ-
ing within administrations, and allow governments to position their countries as blockchain hubs.
Across blockchain strategies, a trend towards

government-driven institutionalisation of block-
"Governments establish chain policy and expertise appears prevalent.
blockchain working groups, Governments establish blockchain working
groups, centers of excellence, innovation hubs
centers of excellence, innovation and authorities. These institutions are mandated
hubs and authorities." with inward- and outward-oriented tasks. In-
ward-oriented tasks include offering expertise and
guidance to legislators and regulators. Out-
ward-oriented tasks include auditing and certifying
technology arrangements, but also helping entrepreneurs navigate the regulatory system. Striving for
international institutionalisation still appears to be less common and more restricted to particular
aspects of blockchain policy. E.g., Germany explores the feasibility of creating an international dispute
resolution authority that could address jurisdictional conflicts in blockchain-powered digital services.
3.3.3 Policy approaches

Governments take different policy and regulatory approaches when dealing with blockchain technolo-
gy. These approaches are not always made explicit in the strategy documents, but a rough categori-
sation is possible. It might help decision and policy makers reflect about their engagement. Govern-
ment involvement in blockchain development can be viewed along three dimensions:
1. timing of involvement,
2. degree of involvement,
3. role in development of (technical) standards.
Timing of involvement: ex-post and ex-ante approaches
Ex-post and ex-ante approaches to blockchain governance present different mindsets in the field of
technology governance. They either make openness the starting point of digital policy or they start
with caution and control. In many strategies, we can observe elements of both.
The ex-post approach stands for openness. It allows for permissionless innovation, meaning that all
innovation with blockchain technology - both on the protocol and on the application layer - is possi-
ble unless declared otherwise. This fosters an innovation ecosystem that is open for unknowns. An
expression of this is Uganda’s Kampala Declaration, which pledges "non-regulation of the blockchain"
until further research has been conducted.
In softer variations of this approach, governments create baseline protections and frameworks that
guide innovation, e.g. by providing regulatory certainty. An example of a softened ex-post approach
is the EU’s or Australia’s encouragement of innovation in the field of digital ID, as long as applications
38
link back to trusted digital identity

frameworks that define requirements
"'Regulatory sandboxing' is a fairly new and different assurance levels (Aus-
supervisory concept allowing companies tralia, also EU eIDAS).
to pilot blockchain-based systems under In contrast, the ex-ante approach

priviledged regulatory conditions within focuses on pre-release certification of
blockchain technology or platforms.
limited time and scope." Essentially, this approach makes
blockchain-based innovation subject
to permission. Governmental authori-
ties take the role of auditors. In the field of financial regulation, the FATF recommendations about AML
and CFT actually suggest such approaches. The Australian and the Maltese strategy, for example,
state that digital currency exchange providers with in-country business operations will have to register
with the regulator. While the advantages of the ex-ante approach lie in the minimisation of risks and a
high degree of national control, it can also stifle innovation, especially from the startup and SME sec-
tors where there is little capacity to engage in heavily administrative processes before understanding
whether a product will be met with demand by the market.
An innovation-friendly path in-between ex-post and ex-ante regulation lies in so-called regulatory
sandboxing (Kenya, Mauritius, Germany). "Regulatory sandboxing" is a fairly new supervisory con-
cept allowing companies to pilot blockchain-based systems under priviledged regulatory conditions
within limited time and scope. This way, the private sector can pilot systems, while governments with
oversight can mitigate risks and learn along the way. Despite the popularity of the term however, there
is little information yet on how sandboxing actually works with regard to blockchain.
Degree of involvement
Different degrees of governmental involvement with blockchain development can be identified in the
strategies. They present different ways and intensities of interacting with and stimulating the ecosys-
tem.
1. Governments support private sector innovation in industries and for use cases that are deemed
to be of national relevance. This type of involvement resembles classical approaches of regional and
sectoral economic support programmes.
2. Governments act as first movers. Here, governments drive the adoption of blockchain technology
by implementing it in public administration for the purpose of good governance. The aim is to directly
improve public service delivery, e.g. by making document processing more efficient or increase trans-
parency and accountability through secure, tamper-proof and transparent handling of data. Application
areas include managing licenses, permits and registries as well as import and export documents or
pension data. By being first movers, governments act not only as regulators, but also as customers
and/or users of blockchain technology. They gather hands-on experience and - by investing in soft-
ware infrastructures - possibly create spillover effects on the private sector to promote innovation and
economic growth.
3. Governments operate and provide blockchain-infrastructure services. In an attempt to in-

crease sometimes national sovereignty and gain independence from existing blockchains that do not
grant states a meaningful role in their governance setups, several governments reclaim their role as
trust-providers and integrate blockchain governance into their political system. They enter the field of
blockchain-as-a-service provision with national blockchain platforms. The European Blockchain Ser-
vices Infrastructure may serve as an example of multiple governments sharing a single infrastructure,
a model that may also be appropriate for African states. It shall initially enable public services, but
shall soon open up to private sector use(r)s as well. Similar plans exist in Kenya, Bangladesh or India.
39
Role in development of (technical) standards
As blockchain technology is maturing, most strategies articulate that it should be a common goal to
strive for widely accepted, interoperable technical standards because such standards can unlock net-
work effects that will help the blockchain ecosystem to flourish. Harmonised (technical) standards are,
among other things, the basis for inclusiveness and connectivity between blockchains, which could in
turn enable interconnected markets as well as interconnected public blockchain infrastructures.
Similar to the field of internet governance, governments have different visions as to which stakeholder
groups should be involved or lead the process of defining such global standards. Positions range from
• leaving standard development in the hands of the private sector and technical communities while
confining their focus on legislative outcomes and generally embracing a language of technological
neutrality to,
• leading standard development by working with international organisations such as the International
Organization for Standardization,48 emphasising public competencies and authority, to
• fostering multi-stakeholder approaches that facilitate collaboration across-industries, between public
and private sectors as well as with civil society.
"It should be a common goal to strive for widely

accepted, interoperable technical standards because
such standards can unlock network effects that will help
the blockchain ecosystem to flourish."
While every government will have its own reasoning with regard to standard development, it seems
worth mentioning that in emergent and connected, but for the most part unregulated industries, techni-
cal standards need the buy in of as many stakeholder groups as possible to become de facto norms.
48 Australia is highlighting its leading role in promoting blockchain standardisation through the ISO where a new ISO technical committee
(# 307) has been established for blockchain standards topics, including interoperability, terminology, privacy, security and auditing. Result
of the group’s work can be found in the catalogue (ISO, 2020. Standards By ISO/TC 307 - Blockchain And Distributed Ledger Technologies.
ISO. Available at: https://www.iso.org/committee/6266604/x/catalogue/ [Accessed 8 May 2020]).
40
Focus box: Regulatory pioneers and blockchain usage by governments in Africa
Ethiopia
The Ethiopian Government partnered49 with blockchain research and development company IOHK
to develop blockchain applications for coffee shipments and other areas of agriculture. IOHK further
announced50 the use of Atala, an enterprise blockchain framework focused on governments in need
of a municipal currency or a supply chain management system, in collaboration with the government
of Ethiopia.
Ghana
In partnership with a blockchain technology platform, the Land Commission and the World Bank
launched a pilot51 project to register lands on a blockchain. The pilot project focused on 20 communi-
ties in Kumasi Ghana.
Mauritius
The Government of Mauritius52 created a regulatory sandbox license allowing development of block-
chain based solutions under the supervision of the financial services regulator. The Economic Devel-
opment Board of Mauritius issued regulatory sandbox licences53 to various FinTech companies.
Kenya
The Capital Markets Authority of Kenya was also among the first regulators in Africa to implement a
sandbox environment for startups and blockchain/fintech companies to test blockchain applications,
however excluding cryptocurrency projects54 out of these incubation efforts in 2019.
Noteworthy are also the efforts of the government of Kenya, specifically its creation of a Blockchain
and AI task force in 2018 and its publication of a comprehensive strategy55 paper outlining regulato-
ry approaches in 2019. After the country’s fast adoption of mobile payment systems, the task force
released a report identifying use cases and recommending the creation of financial and regulatory
sandboxes for emerging technology applications.
The Government of Kenya also explored the use of blockchain in issuing a retail savings bond called
M-Akiba.56 Utilizing a blockchain platform for this service would enable the government to seamlessly
manage a large number of small transactions and accounts.
Nigeria
Nigeria’s National Union of Road Transport Workers launched57 a blockchain- based passenger man-
ifest system to ensure drivers and passenger information are securely captured in a digital, secure,
transparent and fully auditable manner. The blockchain platform was deployed to monitor, track and
analyze all the operations of the scheme in real time.
49 Sundararajan, S., 2018. Ethiopia Is Exploring The Use Of Blockchain Technology To Track The Supply Chain For Its Largest Export,
Coffee. Available at: https://www.coindesk.com/ethiopia-explores-blockchain-role-in-tracking-coffee-exports [Accessed 8 May 2020].
50 Wolfson, R., 2019. Cardano Founder Launches Enterprise Blockchain Framework In Collaboration With Ethiopian Government. Forbes.
Available at: https://www.forbes.com/sites/rachelwolfson/2019/04/30/cardano-founder-launches-enterprise-blockchain-framework-in-
collaboration-with-ethiopian-government/#5eca31164e10 [Accessed 8 May 2020].
51 The World Bank, 2013. Project Performance Assessment Report: Ghana Land Administration Project. The World Bank. Available at:
https://ieg.worldbankgroup.org/sites/default/files/Data/reports/PPAR-75084-P132252-Ghana_Land_Administration.pdf [Accessed 8 May 2020].
52 ConsenSys, 2019. Which Governments Are Using Blockchain Right Now?. Available at: https://consensys.net/blog/enterprise-blockchain/
which-governments-are-using-blockchain-right-now/ [Accessed 8 May 2020].
53 Economic Development Board, 2019. EDB Issues Regulatory Sandbox Licences To Fintech Companies For Their Innovative Projects.
Economic Development Board. Available at: https://www.edbmauritius.org/newsroom/posts/2019/january/edb-issues-regulatory-sandbox-
licences-to-fintech-companies-for-their-innovative-projects/ [Accessed 8 May 2020].
54 Mwaniki, C., 2019. CMA Locks Cryptocurrencies Out Of Innovation Hub. Business Daily Africa. Available at: https://www.businessdailyafrica.
com/markets/marketnews/CMA-locks-cryptocurrencies-out-of-innovation-hub/3815534-4993324-mh01pkz/index.html [Accessed 8 May 2020].
55 Ministry of Information, Communications and Technology, 2019. Emerging Digital Technologies For Kenya. Exploration And Analysis.
Ministry of Information, Communications and Technology. Available at: https://www.ict.go.ke/blockchain.pdf [Accessed 8 May 2020].
56 M-Akiba, n.d. M-Akiba. Available at: https://www.m-akiba.go.ke/ [Accessed 8 May 2020].
57 Avan-Nomayo, O., 2019. Africa Using Blockchain To Drive Change, Part One: Nigeria And Kenya. Cointelegraph. Available at:
https://cointelegraph.com/news/africa-using-blockchain-to-drive-change-nigeria-and-kenya-part-one [Accessed 8 May 2020].
41
As earlier stated, House Africa, an indigenous Nigerian company has partnered with58 the Nigerian
Mortgage Refinancing Company to service land verification for all Nigerian commercial and mort-
gage banks.
Rwanda
The National Bank of Rwanda and Rwanda Utility and Regulatory Authority has established59 a sand-
box facility to test blockchain technology.
In 2018, the country announced60 the world’s first blockchain project to track tantalum from the pit to
refineries in an effort to boost investor confidence of conflict-free sources of minerals.
Sierra Leone
The Government of Sierra Leone announced61 it was developing a blockchain-based digital iden-
tification system. The project is said to be already in the first phase where all identity records are
being digitised. In the subsequent phase, every person shall be issued a unique, non-duplicated and
non-reusable national identity number. The system is planned to be up and running by 2020. The
project is in partnership with the United Nations. It is also planned that credit history will be recorded
on the digital ID, allowing people to access credit instantly.
South Africa
Next to the previously mentioned Next Einstein Forum, regulatory pioneers for blockchain include the
South African Reserve Bank. For their blockchain pilot based on the Ethereum blockchain, the South
African Reserve Bank was recognised with the inaugural "Best Distributed Ledger Initiative" award
from Central Banking Publications.62 The Reserve Bank in April 2019 further issued a tender notice63
requesting for expressions of interest from prospective solution providers in order to explore piloting
a CBDC. The Center for Affordable Housing Finance in Africa also piloted a blockchain-based prop-
erty registry.
Tanzania
The government of Tanzania utilised blockchain technology to audit the public sector payroll thereby
eliminating about 10,000 ghost workers64 from the public sector.
Uganda
The Government of Uganda announced65 that it was going to pilot a proof of concept land titles
registry.
58 Nigeria Mortgage Refinance Company, 2020. NMRC Hosts Stakeholder Workshop On Building Credible Data To Drive Delivery Of
Affordable Housing In Nigeria. Nigeria Mortgage Refinance Company. Available at: https://nmrc.com.ng/nmrc-hosts-stakeholder-workshop-
on-building-credible-data-to-drive-delivery-of-affordable-housing-in-nigeria/ [Accessed 8 May 2020].
59 UNCDF, 2019. The Fintech Landscape In Rwanda. UNCDF. Available at: https://www.uncdf.org/article/5216 [Accessed 8 May 2020].
60 Uwiringiyimana, C., 2018. Rwanda Hosts First Tantalum-Tracking Blockchain. Reuters. Available at:
https://www.reuters.com/article/rwanda-blockchain/rwanda-hosts-first-tantalum-tracking-blockchain-idUSL8N1VM3W9 [Accessed 8 May 2020].
61 The Republic of Sierra Leone State House, 2019. Sierra Leone Gets Africa’s First Blockchain National Digital Identity System.
The Republic of Sierra Leone State House. Available at: https://statehouse.gov.sl/sierra-leone-gets-africas-first-blockchain-national-
digital-identity-system/ [Accessed 8 May 2020].
62 South African Reserve Bank, 2018. Press Statement. South African Reserve Bank. Available at: https://www.resbank.co.za/Lists/
News%20and%20Publications/Attachments/8753/Project%20Khokha%20press%20statement%2006%20September%202018.pdf
63 South African Reserve Bank, 2019. Request For Expression Of Interest From Prospective Solution Providers In Anticipation Of A
Feasibility Project For The Issuance Of Electronic Legal Tender. South African Reserve Bank. Available at: https://www.resbank.co.za
/AboutUs/Departments/FinancialServices/ProcNew/Pages/Publications.aspx?sarbweb=9f333ff2-bf64-4708-a361-076bd6802ff4&
sarblist=fdf9dae8-3990-44d4-b89a-c87649f22461&sarbitem=40 [Accessed 8 May 2020].
64 Ng’wanakilala, F., 2016. Tanzania Says Over 10,000 'Ghost Workers' Purged From Government Payroll. Reuters. Available at:
https://www.reuters.com/article/us-tanzania-corruption/tanzania-says-over-10000-ghost-workers-purged-from-government-
payroll-idUSKCN0Y70RW [Accessed 8 May 2020].
65 Economic Development Board, 2019. EDB Issues Regulatory Sandbox Licences To Fintech Companies For Their Innovative Projects.
Economic Development Board. Available at: https://www.edbmauritius.org/newsroom/posts/2019/january/edb-issues-regulatory-sandbox-
licences-to-fintech-companies-for-their-innovative-projects/ [Accessed 8 May 2020].
42
42
4. RECOMMENDATIONS FOR THE

DEVELOPMENT OF BLOCKCHAIN
TECHNOLOGY IN AFRICA
This report has presented specific opportunities and challenges that block-
chain technology poses when applied in an African context to further cap-
italise on its potential. As the technology’s concepts may mirror a sense of
community present across the continent, it may also assist in further cultivat-
ing the overarching cross-continental harmonisation. As such, it offers ICT
decision and policy makers the opportunity to support not only economic and
social development in Africa, but also the continent's vision of "an integrated,
prosperous and peaceful Africa, driven by its own citizens and representing a
dynamic force in the global arena"66.
However, the regulatory frameworks for blockchain are still very uncertain,
thereby limiting institutional, government and widespread adoption. ICT
decision and policy makers therefore need to work with stakeholders to un-
derstand the technology in detail in order to regulate it in a way to drive inno-
vation and not stifle it. Previously mentioned regulatory pioneers are providing
helpful examples in how collaboration on early innovations can take place.
Additionally, it must be kept in mind that blockchain development also de-
pends on internet development. Many blockchain applications and all block-
chain protocols need network infrastructure to run on, i.e. typically internet
connectivity. That is why fostering internet connectivity and internet access
across Africa is a foundational recommendation. With regard to blockchain
technology in particular, the following cross-cutting issues need addressing
by ICT decision and policy makers.
66 African Union. 2020. Vision Of The African Union. Available at: https://au.int/en/about/vision [Accessed 8 May 2020].
43
4.1 Strategy: entering a blockchain-enabled

future with a plan
SUGGESTION:
Develop a pan-African blockchain strategy in accordance with the African Union’s digital strategy.
RATIONALE:
Blockchain technology offers vast design options and can be implemented for a plethora of use cases.
Any blockchain application requires thoughtfully arranging on-chain and off-chain governance. In this
complex scenario, a blockchain strategy helps by developing a common objective and vision. On the
national level, a blockchain strategy identifies country-specific opportunities, provides guidance on how
to unleash these potentials and marks desirable as well as necessary growth areas. At the pan-African
level, the opportunity is even greater: a pan-African blockchain strategy could be a tool to start bridging
different jurisdictions and avoid high legal costs for blockchain systems to be compliant across the con-
tinent. If designed in an inclusive manner, the process of strategy development itself presents an op-
portunity to grow both the national and the African blockchain ecosystems. By harnessing contributions
in a multi-stakeholder dialogue, the screening of opportunities and obstacles becomes more complete
and potential lines of conflict can be reconciled early on. Such a dialogue or alternatively, a review
mechanism, should include the private sector, the technical community, research and civil society. In
the international context, a blockchain strategy presents a valuable document to communicate policy
positions, signal aspirations and make states approachable for collaboration and investments.
HOW TO PUT THE SUGGESTION INTO PRACTICE:
Bring all parties from the existing ecosystem to the table on equal footing, including ICT and financial
regulators, blockchain associations, businesses, innovation hubs, researchers and representatives
from the digital civil society. Develop a common vision and plan for a promising and suitable block-
chain journey. Many blockchain strategies plan for similar stages:
• Explore the technology: gather and analyse the plethora of possible use cases.
• Gather hands-on experience: conduct action research by initiating pilot projects to verify opportuni-
ties, identify hurdles and discard unfeasible applications.
• Broaden the knowledge base: encourage interdisciplinary research and foster in-country capacity
building.
• Create innovation-friendly regulatory regimes and reduce regulatory uncertainties: address policy
challenges that arise from the interplay of architectural properties and the in-country institutional
landscape, e.g. in the areas of data protection, financial regulation, standardisation and interopera-
bility. Consider engaging with existing and emerging bodies for standardisation and their resources,
e.g. FATF for financial regulation, the International Organization for Standardization for market rele-
vant standards, the Coalition for Automated Legal Applications for the coordination of legal questions
and associations aiming at fostering the discussion between governmental bodies, research, science
and private industry like the International Association of Trusted Blockchain Applications (INATBA).
• Focus and assign resources: identify application areas that are both viable and strategically valuable
and devote resources to these areas.
44
44
4.2 Data protection harmonisation: creating equivalent

levels of data protection across the African continent
SUGGESTIONS:
• Seek pan-African harmonisation of data protection by negotiating consensus on the regulatory goals.
• Leave regulatory means to individual countries while creating a mechanism for mutual recognition of
data protection laws.
• Mandate public authorities for monitoring and enforcing data protection laws, equip them with the
necessary powers and resources.
RATIONALE:
Harmonisation of data protection on the African continent would create legal certainty as African soci-
eties transform into the digital age. It is a precondition for a digital single market and a cornerstone for
any cross-border blockchain-based service. A consensus on regulatory goals can be combined with
general guidelines regarding the implementation. On this basis, harmonisation can be achieved by
developing a framework and mechanisms for mutual recognition of existing data protection regulations.
This would provide for an adequate level of protection across the African continent, while allowing for
national characteristics in the implementation of data protection regulations in the laws of the individual
African countries. Supervisory authorities play a major role in achieving data protection in practice. In
order to fulfil their tasks of monitoring and enforcing data protection laws, they need to be equipped
with proper mandates, powers and resources. Consistent application of data protection nationally and
across Africa can be achieved by fostering their cooperation, information sharing and rendering mutual
assistance. The role of pan-African organisations, like RAPDP will be crucial to this end.
HOW TO PUT THE SUGGESTIONS INTO PRACTICE:
• Set up a process to negotiate regulatory objectives and to find consensus between countries. Keep
in mind that views on the parameters in question can strongly depend on the socio-historical, political
and cultural context. That is why the EU General Data Protection Regulation can serve as inspira-
tion, but not a copy & paste catalogue.
• Leave regulatory means to individual countries.
• When operationalising data protection goals, be aware of the use and possible interplay of different
legal techniques (rights-based vs. duty-based approach).
• Countries should mandate other countries’ laws on the directive to be equivalent and applicable.
• Build capacity of data protection officials responsible for harmonisation.
• Establish data protection authorities with clear mandate and adequate resources.
45
4.3 Data protection and blockchain: clarifying the viability of

distributed ledger system designs
SUGGESTION:
Decide about policy options at the intersection of data protection and blockchain technology according
to the values and policy goals of individual countries and the African community, not according to real
or perceived technical constraints. Establish "data protection by design" provisions in data protection
laws.
RATIONALE:
Blockchain technology can be very flexibly designed, thus, it can be political decisions that guide the
design, implementation and use of such systems, and not the other way around. With the primacy of
political decisions on what is to be protected and how, "data protection by design" provisions can guide
the design, implementation and use of blockchain technology by applying appropriate technical and or-
ganisational measures to ensure the protection of the protected goods and to meet the requirements of
the applicable laws, whether these requirements are formulated as objective duties, subjective rights,
or both.
• When determining desired data protection outcomes with regard to blockchain technology, consider
key parameters or tension points, including:
• secrecy vs. transparency,
• remembering vs. forgetting,
• data subjects, enforcement and oversight.
• Let the design of blockchain-based systems follow data protection objectives and not vice versa.
46
46
4.4 Financial regulation: creating legal certainty without

stifling innovation
SUGGESTIONS:
In order to reach the goals of innovation, business development and socio-political progress with
the help of blockchain technology, legal certainty in financial markets regulation is one of the major
preconditions. Therefore, ICT policy and decision makers, in close collaboration with financial regula-
tors, may consider the option of developing a pan-African concept for token classification. This could
include security tokens, tokens representing other financial instruments such as e-money or payment
and unregulated tokens, e.g. voucher and club tokens. Disclosure and registration regimes for security
tokens could be an instrument to achieve stakeholder protection. Policy and decision makers may
also consider introducing license regimes for service providers concerning security and other financial
instruments tokens, specifically taking into account compliance with the relevant FATF recommenda-
tions.
RATIONALE:
Financial regulatory regimes typically serve the protection of financial stability and investors as well as
other financial services’ customer protection. Some tokens might trigger concerns in this regard while
others rather compare to instruments not typically caught by financial regulation (e.g. a voucher for a
mere software license). In order not to stifle innovation beyond what is required by these goals, devel-
opers benefit from legal certainty about token classifications. As a consequence certain software might
only be deployed if the applicable disclosure regime is obeyed or if entities hold applicable licenses.
Developers might only offer such software as a service but not deploy their software themselves. In
contrast, software issuing or servicing unregulated tokens can be freely deployed by anyone.
Anything that is marketed as an investment opportunity to the public could then trigger certain min-
imum disclosure rules (typically a prospectus) to ensure that the public has sufficient information at
hand to come to an educated investment decision. It appears advisable to create legal certainty about
such disclosure rules, which might ideally be harmonised across the continent to limit the legal costs of
a compliant security token issuance.
Any service provider offering to deal with customers’ financial instruments or assets could be regulated
to prevent fraud and to ensure high quality best practices in order to protect the financial instruments
belonging to third parties. In addition, monitoring financial transactions to prevent money laundering as
well as terrorism financing is a common public interest which is typically outsourced by governments
to the regulated finanical service industry. Hence, FATF recommendations require that virtual asset
service providers are licensed or at least registered.
HOW TO PUT THE SUGGESTIONS INTO PRACTICE:
• Collaboratively, ICT and financial policy makers could (re)visit concepts from regions with already
highly sophisticated financial regulation (EU, US and Asia) to carefully assess, evaluate and com-
pare these in the blockchain context.
• When thinking about setting Africa-specific standards, policy and decision makers should consider
that if the goals of the regulatory regime of another important economic area coincide with their own
policy goals, (partly) mirroring regulation can lower the legal costs for projects to include Africa in
their service offerings.67
• One option to enter into a discussion of regulatory concepts would be to join the Governmental Ad-
visory Body of INATBA (initiated by the European Commission in 2019). The European Commission
had been highly interested to interact with Africa in this regard and INATBA shall be much obliged to
include African governmental representatives in their Advisory Bodies.
67 Consider the general caveats that apply to importing regulatory measures from other legislative systems and jurisdictions, as explained in
the chapter on data protection.
47
4.5 Capacity building: increasing readiness for uptake of

blockchain technology in Africa
SUGGESTIONS:
Support research and education about blockchain technology and blockchain governance. Foster
skills, develop talent and stimulate innovation.
RATIONALE:
The education levels on blockchain and other advanced technologies in Africa are low. On the one
hand, this poses a problem for projects and initiatives to find and attract adequate talent for solution
development. On the other hand, low levels of technology awareness and education can also pose a
problem in the rollout and adoption of consumer-focused applications, especially in rural areas and the
so-called "last mile".
• Build a network. The Smart Africa Secretariat could help in this task with its convening power.
• Map already existing initiatives and identify capacity development needs. Engage with research insti-
tutions68 and blockchain associations69 across the continent. Collaborate with blockchain innovation
hubs.70
• Understand that especially for the African startup ecosystem, securing international collaborations
and funding, as well as participation in international dialogue can be quite challenging. The partici-
pation in international industry events is often hindered by visa requirements and limited availability
of travel funding, which makes startups often reliant on international mediators or team members to
build connections. Previously mentioned groups, events and associations with a more international
focus can play a key role in a better facilitation of those connections.
• Foster the meetup and event culture that is typical for blockchain. It serves to connect entrepreneurs
to investors, policymakers, corporates and the larger ecosystem.71
• Create educational programmes for users, innovators and policy-makers alike. Leaders could go
abroad for training, e. g. ministers of finance to understand blockchain and intensify collaboration
between entrepreneurs and government.
68 Within the scientific community, the Next Einstein Forum (NEF; https://nef.org/) plays an important role in connecting science, society
and policy in Africa to the rest of the world. Its innovation index captures progress in STEM education, as well as output of innovation and
investment.
69 The following associations offer connections into the existing entrepreneurial ecosystem: Africa Blockchain Alliance, South African Na-
tional Blockchain Alliance, Cryptography Development Initiative Nigeria, Blockchain Association of Kenya, Blockchain Association of Uganda,
Cameroon Blockchain Business Council, Blockchain Tanzania Community, Blockchain Society Ghana.
70 Hubs exist in Cape Town, Stellenbosch, Johannesburg, Lagos, Nairobi, Kampala, Yaonde, Addis Ababa and Gaborone.
71 The largest Blockchain Conference on the African continent is held in Johannesburg, South Africa. Another relevant event is the Africa
Tech Summit held annually in Kigali, Rwanda. Meetups already occur in hubs like Cape Town, Johannesburg, Nairobi and Lagos.
48
48
4.6 Public utility: a pan-African blockchain service

infrastructure
SUGGESTION:
Explore the feasibility of creating and operating a pan-African blockchain service infrastructure that
offers a testbed for researchers, enterprises and administrations to run blockchain-based applications.
RATIONALE:
For blockchain systems to sustainably deliver the benefits that DLT are praised for - i.e. immutability,
automation and trust in transactions - they need to be operated in an assuring governance environ-
ment that provides certainty for blockchain-based service providers and users. As has been pointed
out, this is not always the case with blockchains. Creating such off-chain governance arrangements
can be as challenging as the technical design of blockchain applications itself. In addition, reconciling
the openness of public, permissionless blockchains with governmental duties and jurisdictional realities
can be singled out as the greatest challenge that inhibits the uptake of distributed ledger technologies
at large.
A federated blockchain infrastructure to be maintained by a union of states could present a compro-

mise. It could offer a common infrastructure that would allow administrations and enterprises to test
and run blockchain-based services while catering for regulatory needs in the fields of data protection
and finance. Such a collaboratively maintained blockchain service infrastructure could gain user trust,
because the very fact that states with sometimes competing interests would maintain it together would
indicate a healthy degree of scrutiny.72 That is (one of) the distinct advantage(s) of a pan-African initia-
tive over a national initiative.
In terms of industry policy, operating such an infrastructure would be an example of mission-driven

economic policy where governments act as first movers. This may create spill-over effects. It can
spur confidence in the overall still uncertain blockchain innovation environment. The availability of
such an infrastructure would also lower the threshold for innovators to test the viability of their block-
chain-based applications and business ideas. As a caveat, advances in harmonisation of data protec-
tion may be a precondition for the viability of such a project.
The biggest challenge in creating a common blockchain infrastructure among parties who cannot be
assumed to share interests beyond receiving the benefits of a resilient, trustworthy and performant dis-
tributed ledger network service would be to bring them to the same table and get them to agree on the
off-chain governance model. The Smart Africa Secretariat could serve as a neutral convener to help
African states explore the idea to collaboratively maintain such an infrastructure. Technical inspiration
can be taken from various national blockchain service infrastructures; governance inspiration can be
taken from the European Blockchain Service Infrastructure.
72 On the trust-generating role of distrust in governance see Sztompka, P., 1997. Trust, Distrust And The Paradox Of Democracy. WZB
Discussion Paper, No. P 97-003. WZB Berlin Social Science Center. Available at: http://hdl.handle.net/10419/50255 [Accessed 8 May 2020].
49
4.7 Interoperability and standards: aligning with global

standards and best practices
SUGGESTION:
Push for interoperability and harmonised standards, specifically to enable interconnectivity between
different blockchains.
RATIONALE:
Integration points across various blockchain protocols and into legacy systems are often limited. Users
of different blockchain networks cannot interact and transact with each other frictionlessly and without
extra cost. Custom solutions need to be built to make blockchain systems interoperable with each
other and with legacy systems, if possible at all. The introduction of adequate standards thus plays a
key role in building scalable and interoperable systems across company, institutional and governmen-
tal levels. Common standards are also regarded as a cornerstone to achieve global interconnection of
regional digital markets, e.g. markets for emission trading.
HOW TO PUT SUGGESTION INTO PRACTICE:
Interoperability of blockchain networks, protocols and applications remains an issue at the stage of
research and development because it involves business model, platform and infrastructure aspects.
The World Economic Forum lists73 a number of organisations that currently work on the topic and could
be approached for further information and collaboration.
73 World Economic Forum and Deloitte, 2020. Inclusive Deployment Of Blockchain For Supply Chains: Part 6 - A Framework For Blockchain
Interoperability. World Economic Forum and Deloitte, p.11. Available at: http://www3.weforum.org/docs/WEF_A_Framework_for_Blockchain_I
nteroperability_2020.pdf [Accessed 8 May 2020].
50
50
5. APPENDIX: NATIONAL BLOCKCHAIN

STRATEGY DOCUMENTS
State or Publication
Title Institutions involved Reference
Region Date
The National Blockchain Department of Industry, Science, https://www.industry.gov.au/sites/default/files/2020-02/

Australia February 2020
Roadmap Energy and Resources national-blockchain-roadmap.pdf
https://ictd.portal.gov.bd/sites/default/files/files/ictd.portal.
National Blockchain
Bangladesh January 2020 gov.bd/page/6c9773a2_7556_4395_bbec_f132b9d819f0/
Strategy
National%20Blockchain%20Strategy%20-%20Bangladesh.pdf
http://politiquesdigitals.gencat.cat/web/.content/
Blockchain Strategy of
Catalonia June 2019 Government of Catalonia Telecomunicacions/Blockchain/destacats-informes-descarreg-
Catalonia
ues/Estrategia-Blockchain-a-Catalunya-VF_1_EN.pdf
Government and House of Represen- http://www.parliament.cy/images/media/assetfile/Blockchain%20

Cyprus National Strategy 2019
tatives Strategy%20English_FINAL.pdf
https://www.smartdubai.ae/docs/default-source/publications/
Dubai Future Council for Blockchain,
Dubai Dubai Blockchain Policy November 2019 reference-document--dubai-blockchain-policy.pdf?s-
part of the Dubai Future Councils
fvrsn=19522b4_4
European Cooperation on a Europe- European Council, European Com- https://ec.europa.eu/digital-single-market/en/news/

April 2018
Union an Blockchain Partnership mission european-countries-join-blockchain-partnership
Les enjeux des block- France Stratégie, an autonomous in- https://www.strategie.gouv.fr/sites/strategie.gouv.fr/files/atoms/

France June 2018
chains stitution reporting to the Prime Minister files/fs-rapport-blockchain-21-juin-2018.pdf
Solutions for a responsi-

ble use of the blockchain Commission Nationale Informatique & https://www.cnil.fr/sites/default/files/atoms/files/
France September 2018
in the context of personal Libertés (CNIL) blockchain_en.pdf
data
Federal Ministry of Economics and

Blockchain Strategy of the https://www.bmwi.de/Redaktion/DE/Publikationen/Digitale-Welt/
Germany September 2019 Technology (BMWi), Federal Ministry
Federal Government blockchain-strategie.pdf?__blob=publicationFile&v=8
of Finance (BMF)
Blockchain: the India NITI Aayog, a Policy Think Tank https://niti.gov.in/sites/default/files/2020-01/Blockchain_The_

India January 2020
Strategy Part I advising the Indian government India_Strategy_Part_I.pdf
Ministry of Information, Communica-

Emerging Digital Technol-
tions and Technology, The Distributed
Kenya ogies for Kenya. Explora- July 2019 https://www.ict.go.ke/blockchain.pdf
Ledgers Technology and Artificial
tion and Analysis
Intelligence Taskforce
Establishment of the
Parliamentary Secretariat for Financial https://meae.gov.mt/en/Public_Consultations/OPM/Documents/
Malta Digital Innovation
Malta March 2018 Services, Digital Economy and Inno- PS%20FSDEI%20-%20DLT%20Regulation%20Document%20
Authority, proposed Gov-
vation, Office of the Prime Minister OUTPUT.PDF
ernance arrangements
https://www.nederlanddigitaal.nl/documenten/
Dutch Digitalisation Ministry of Economic Affairs and
Netherlands June 2019 publicaties/2019/11/13/english-version-of-the-dutch-digitalisa-
Strategy 2.0 Climate policy
tion-strategy-2.0
Blockchain Technology http://www.businesskorea.co.kr/news/articleView.html?idx-

South Korea June 2018 Ministry of Science and ICT
Development Strategy no=23184
Declaration on Funda- University of Birmingham, United

http://unafri.or.ug/wp-content/uploads/2018/04/Kampala-
mental Principles on the Nations African Institute for the
Uganda July 2017 Declaration-on-Principles-on-regulation-of-cryptocurrencies
regulation of cryptocurren- Prevention of Crime and Treatment of
-and-Blockchain-April-23.pdf
cies and the Blockchain Offenders (UNAFRI)
https://u.ae/en/about-the-uae/strategies-initiatives-and-awards/
United Arab Emirates Blockchain Government of the United Arab
April 2018 federal-governments-strategies-and-plans/emirates-block-
Emirates Strategy 2021 Emirates
chain-strategy-2021

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BLOCKCHAIN IN AFRICA:

OPPORTUNITIES AND CHALLENGES FOR THE NEXT DECADE

AML Anti-money laundering

BIS Bank for International Settlements

CBDC Central bank digital currency

CDD Customer due diligence

CFT Counter terrorism financing

DLT Distributed ledgertechnologies

FATF Financial Action Task Force

INATBA International Association of Trusted Blockchain Applications

KYC Know your customer

RAPDP African Data Protection Network

SME Small and medium enterprises

Edited by Olivier Gakwaya, Dr Uta Meier-Hahn,

The Smart Africa Secretariat (SAS) and Deutsche Gesellschaft für

Kigali, Rwanda, 2020.

1. INTRODUCTION: BLOCKCHAIN TECHNOLOGY IN A NUTSHELL.............................................................................. 8

2. THE EMERGING BLOCKCHAIN TECHNOLOGY ECOSYSTEM ON THE AFRICAN CONTINENT:

4. RECOMMENDATIONS FOR THE DEVELOPMENT OF BLOCKCHAIN TECHNOLOGY IN AFRICA......................... 42

5. APPENDIX: NATIONAL BLOCKCHAIN STRATEGY DOCUMENTS............................................................................ 50

• Digital payment infrastructures, including central bank digital currencies,

To inform African decision and policy

• Data protection harmonisation: seek pan-African harmonisation of data protection by negotiating

mechanism for mutual recognition of data protection laws. Man-

• Blockchain-specific considerations for data protection:

• Financial regulation: develop a pan-African concept for token

• Push for interoperability and harmonised standards, specifically to enable interconnectivity

Blockchain follows in a long tradition of

Working definition: A blockchain is an append-

Figure 1: The technologies

1.1 Core features

...which is then broadcasted These nodes validate the request

Transactions can involve any type of data

The new block is appended Upon validation, transactions

Figure 2: Transactions on a blockchain

1.2 Known limitations

In addition to these technical challenges, blockchain

2. THE EMERGING BLOCKCHAIN

For this report, the comprehensive

KEY PROJECT CATEGORIES

Finance & Insurance 26

Agriculture & Food 11

Identity & Ownership 6

Aid & Philanthropy 4

Government & Democracy 4

Trade & Logistics 2

Products & Consumption 1

Figure 3: Blockchain projects in Africa by sector, according to PositiveBlockchain.io

• Public spending and governance

2.1 Digital payment infrastructures: blockchain-based

So far, the following approaches to backing

2.1.2 Central bank digital currencies

Current retail CBDC projects

Motives for a CBDC introduction

Drawbacks of a CBDC introduction

2.1.3 Fiscal and geopolitical dimensions

Further information on this use case:

2.2 Public spending and governance

• The partner country is in full control of donor funded projects.

"Blockchain-based workflow tools can allow for efficient project

RAPDP African Data Protection Network

2. THE EMERGING BLOCKCHAIN TECHNOLOGY ECOSYSTEM ON THE AFRICAN CONTINENT: