Web 3.0 technologies, including blockchain and decentralized applications, represent a novel paradigm that regulatory bodies may not fully understand. The lack of understanding can lead to cautious or restrictive regulatory approaches.
The decentralized nature of many Web 3.0 technologies can be exploited for illicit activities such as money laundering, fraud, and tax evasion. Regulatory bodies are concerned about the potential misuse of these technologies. That's why they are taking strict action against such technologies.
Jathin Jagannath, the developer advocate for Cartesi, a Web3 rollup protocol, has identified regulatory uncertainties as a significant obstacle to the adoption of Web3 technologies in Africa. According to Jagannath, the lack of clear regulations creates hesitation among potential users and investors.
Despite Africa's potential for Web3 innovation, there is a massive lack of education and accessibility to knowledge. Jathin emphasizes the need for improved digital literacy and infrastructure upgrades to overcome these challenges.
A recent report shows a substantial increase in blockchain funding across Africa, with Kenya, Nigeria, and South Africa leading in Web3 adoption. The news of the Coinbase partnership with Yellow Card remains good for African Finance, as it can also help in expanding crypto access.
To address education challenges, Cartesi and Web3bridge are collaborating on an eight-week masterclass in Nigeria to enhance developers' skills.
Jathin sees the younger demographic and volatile currency in Africa as factors contributing to a Web3 boom in 2024, with decentralized wallets and applications potentially transforming how Africans engage with financial systems and cross-border trade. Moreover, Tunisian Universities are trying to make financial services more accessible for African communities.
According to Coin Gabbar, regulatory bodies often aim to protect consumers and investors. The absence of intermediaries in some Web 3.0 applications might mean reduced consumer protection, leading regulators to intervene to safeguard users.
Cryptocurrencies and decentralized finance (DeFi) platforms within the Web 3.0 space can sometimes operate independently of traditional financial systems. Regulators may be concerned about the impact of these technologies on financial stability.
Moreover, the decentralized nature of some Web 3.0 systems can make it challenging for law enforcement to track and apprehend individuals involved in illegal activities. This can be a concern for regulators tasked with maintaining law and order.
The borderless nature of transactions in Web 3.0 can pose challenges for taxation authorities. Regulators may be concerned about the potential for tax evasion and the difficulty of tracking and taxing decentralized transactions.
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