As the digital world pivots towards decentralisation, compliance professionals across the globe are facing a new frontier. Web 3.0 reshapes compliance and financial crime compliance by decentralising financial systems.
This enhances transparency through block-chain but simultaneously complicates enforcement due to pseudonymity, cross-border jurisdictional gaps and the rapid evolution of technologies such as decentralised finance (DeFi) and non-fungible tokens (NFTs) demanding a shift from traditional oversight to proactive, tech-driven regulatory strategies.
To understand where we are going, we must first look at where we have been.
Web 3.0, often called the decentralised web, is the third generation of internet technology that aims to give users more control over their data, identity, and digital interactions.
Unlike Web 1.0 (static, read-only pages) and Web 2.0 (interactive, user-generated content on centralised platforms), Web 3.0 is built on blockchain, smart contracts, and decentralised protocols.
It is sometimes referred to as the Semantic Web, a term coined by Tim Berners-Lee, where machines can understand and interpret data contextually to deliver more intelligent and personalised experiences.
Key characteristics include:
Decentralisation: No single entity controls the network;
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Trustless and permissionless: Users interact directly without intermediaries;
Ownership and tokenisation: Digital assets and identities are user-owned;
Interoperability: Apps and services can work seamlessly across platforms;
Transparency: Due to the public and auditable nature of underlying technologies such as blockchain, online processes and transactions become more transparent and verifiable.
The compliance conundrum
Web 3.0 introduces decentralised finance (DeFi), non-fungible tokens, and Decentralised Autonomous Organisation (DAOs) technologies that eliminate intermediaries but also challenge traditional compliance models.
While blockchain offers transparency, its pseudonymous nature complicates identity verification and transaction tracing.
Key challenges:
Anonymity vs. accountability: Pseudonymous wallets make it harder to trace illicit actors;
Jurisdictional gaps: Decentralised platforms often operate outside traditional legal boundaries;
Rapid innovation: Regulators struggle to keep pace with emerging technologies;
Regulatory uncertainty: The decentralised nature of Web 3.0 makes it difficult for regulators to apply traditional legal frameworks. Without clear global standards, developers and users face legal ambiguity, especially around crypto assets, DAOs, and DeFi platforms;
User privacy vs. compliance: While Web 3.0 champions data ownership and privacy, compliance requirements like KYC and AML often demand identity verification. Balancing these opposing forces is a major challenge for both developers and regulators;
Scalability and performance: Many blockchain networks still struggle with transaction speed and scalability. High gas fees and slow confirmation times can hinder user experience and limit adoption;
Security risks: Smart contracts are immutable once deployed, meaning bugs or vulnerabilities can be exploited permanently. Hacks, rug pulls, and protocol exploits remain a significant threat;
Interoperability: With so many blockchains and protocols, ensuring seamless interaction between platforms is still a work in progress. Lack of interoperability can fragment the ecosystem and limit innovation.
Africa’s Web 3.0 Surge
Web 3.0 is gaining serious traction across Africa, with countries like Kenya, Nigeria, and South Africa emerging as regional leaders in blockchain innovation and adoption.
According to a 2023 report by EMURGO Africa and PwC, these three countries alone attracted approximately US$88,5 million in blockchain-related investments in 2021, signalling strong investor confidence in the continent’s digital future.
Despite this growth, Africa still received only 0,5% of global blockchain funding in 2022.
That said, the continent is uniquely positioned to leapfrog legacy systems, especially in areas such as financial inclusion, digital identity and supply chain transparency.
Africa matters in the world of Web 3.0 because it represents both a testing ground and a launchpad for decentralised innovation that addresses real-world challenges at scale.
With a young, tech-savvy population, high mobile penetration, and a history of leapfrogging legacy infrastructure, the continent is uniquely positioned to shape the future of the decentralised web. The issues highlighted below shows why Africa is crucial for web 3.0
Financial inclusion: Web 3.0 offers alternatives to traditional banking, which is crucial in regions where over 50% of adults remain unbanked;
Digital identity: Decentralised ID systems can empower millions who lack formal documentation, unlocking access to services and rights;
Remittances and payments: Blockchain enables faster, cheaper cross border transactions — vital in a continent where remittances are a lifeline;
Youth-driven innovation: With over 60% of the population under 25, Africa is a hotbed for Web3 start-ups, developers, and creators;
Investment growth: Blockchain investment in Africa surged by over 1 600% between 2021 and 2022, reaching US$1,2 billion in 2023.
Trends to watch
Decentralised identity (DID);
Regulatory sandboxes;
Cross border collaboration;
Crypto powered financial inclusion;
Disintermediation of traditional networks;
Selective adoption and hybrid models;
Smart contracts for compliance.
What’s next for compliance and anti-financial crime professionals?
To be future-ready for Web 3.0, compliance and anti-financial crime professionals must evolve from rule enforcers to tech-savvy strategists blending traditional expertise with a deep understanding of decentralised systems. To be future-ready compliance professionals should:
Master blockchain and smart contract fundamentals: Understanding how blockchain works including wallets, tokens, and smart contracts is essential. Professionals should be able to interpret on-chain data and assess risks in decentralised finance (DeFi), NFTs, and DAOs;
Upskill in RegTech and AI tools: AI is no longer optional. From transaction monitoring to sanctions screening, machine learning is powering next-gen compliance. Learning how to work with these tools rather than being replaced by them is key;
Embrace On-Chain analytics and forensics: Tools like Chainalysis, TRM Labs, and Elliptic are becoming standard for tracing illicit crypto flows. Professionals should be comfortable using these platforms to investigate fraud, money laundering, and sanctions evasion;
Stay ahead of regulatory shifts: Web 3.0 is evolving faster than regulation. Professionals must track developments such as the FATF Travel Rule, MiCA in the EU, and local crypto laws to ensure proactive compliance strategies;
Engage in cross border collaboration: Decentralised systems don’t respect borders. Professionals should build networks across jurisdictions, participate in global forums, and advocate for harmonised standards;
Understand new risk typologies: Web 3.0 introduces novel threats like rug pulls, flash loan exploits, and mixer based laundering. Staying informed on emerging typologies is critical to effective risk mitigation;
Invest in continuous learning: Attend industry events and pursue certifications that focus on digital assets and blockchain compliance;
Champion ethical innovation: Compliance professionals should not just react. They should shape the future. By advising startups, contributing to policy and promoting ethical design, they can help build a safer decentralised ecosystem.
Web 3.0 isn’t just a tech shift. It is a mindset shift. Professionals who thrive will be those who adapt, collaborate and lead with curiosity and courage.
Opportunity and vigilance
Web3.0 is not just a technological shift. It is a philosophical one. For Africa, it represents a chance to leapfrog legacy systems and build a more inclusive financial future. But with great opportunity comes great responsibility. Compliance professionals must evolve from gatekeepers to enablers balancing innovation with integrity.
This article was writeen by Mugwagwa on behalf of the Compliance Society of Zimbabwe (CoSoZ). — [email protected]. These weekly New Perspectives articles, published in the Zimbabwe Independent, are coordinated by Lovemore Kadenge, an independent consultant, managing consultant of Zawale Consultants (Pvt) Ltd, past president of the Zimbabwe Economics Society and past president of the Chartered Governance and Accountancy Institute in Zimbabwe (CGI Zim). — [email protected] or mobile: +263 772 382 852.
Chikowore is an international development consultant with expertise in public policy and research analysis of public and private finance, climate finance, health and education financing and child rights. He currently focuses on African Union and G20 Advocacy. — [email protected]. These weekly New Perspectives articles, published in the Zimbabwe Independent, are coordinated by Lovemore Kadenge, an independent consultant, managing consultant of Zawale Consultants (Pvt) Ltd, past president of the Zimbabwe Economics Society and past president of the Chartered Governance and Accountancy Institute in Zimbabwe (CGI Zim). — [email protected] or mobile: +263 772 382 852.
