State of Bitcoin Literature in Africa: Part 4
A new peer-reviewed study asked whether blockchain can meaningfully improve African capital markets, or whether it will simply digitize existing institutional failures.
C. Osemwengie’s Spectrum of Adoption of Blockchain Technology: Implications for Emerging Markets in Africa, published in the Journal of British Blockchain Association, pushes back against the assumption that blockchain is a shortcut to fixing Africa’s capital market problems—poor governance, slow settlement, weak oversight, and low trust.
Using Nigeria as a case study, the paper argues that blockchain’s impact is shaped less by its technical features and more by the strength of the institutions that govern it. Drawing on Douglass North’s institutional theory, Osemwengie places blockchain adoption on a spectrum—from radical disintermediation to hybrid models that retain traditional intermediaries.
The argument is clear-eyed: while blockchain can shorten settlement cycles, improve record-keeping, and enable asset tokenization, it cannot, on its own, fix weak governance, poor enforcement, or custodial failures.
One of the paper’s strongest contributions is its focus on custody and accountability. By examining cases such as CSCS v. Bonkolans, where market Central Securities Depository failed to prevent fraudulent share transactions through collusion with intermediaries, it shows how institutional failures have undermined trust in Nigeria’s capital market.
This example grounds the analysis in legal and institutional reality, reinforcing the argument that introducing blockchain without reforming market institutions risks reproducing the same problems in digital form.
However, the paper’s caution also creates notable gaps. Bitcoin itself is largely absent from the analysis. Blockchain is treated strictly as market infrastructure, not as money.
The paper focuses on permissioned systems where regulators and institutions retain control over validation and access, rather than examining permissionless alternatives where no central authority governs participation. This leaves unanswered whether non-custodial and peer-to-peer monetary systems could address trust deficits in ways regulated capital markets cannot.
The methodology reinforces these gaps. Interview participants are regulators, compliance officers, and academics—not retail investors, informal traders, or Bitcoin users. African agency is framed primarily through regulators and formal institutions, while informal economies and grassroots adoption remain largely invisible.
These omissions matter. If blockchain adoption in Africa is limited to hybrid models governed by institutions with long-standing accountability issues, transparency may become cosmetic rather than transformative. Faster settlement and immutable records mean little if enforcement remains weak and collusion persists.
The paper rightly warns that blockchain risks “digitizing dysfunction” but does not fully ask whether that risk is inherent to the hybrid model itself.
Osemwengie’s study ultimately points in the right direction: Africa’s capital markets do not need technology alone, but institutional rebuilding alongside it. Future research should push further by asking deeper questions—about Bitcoin as money, about trust beyond incumbents, and about whether meaningful reform can occur without rethinking who controls market infrastructure in the first place.
