Cryptocurrency in Kenya: What is It and How Does It Work?
Cryptocurrency and the Kenyan Government
Kenya is an African country, known for its innovation and technological inclinations. And so, it’s no surprise that quite a number of Kenyans have joined the cryptocurrency market and are one with the rush for cryptocurrency which almost every country in the world can testify to. However, the Central Bank of Kenya (CBK) has expressed its displeasure at the recent advancement. The following warning was issued by CBK regarding trading and cryptocurrency investments; “This is to inform the public that virtual currencies such as Bitcoin are not legal tender in Kenya and therefore no protection exists in the event that the platform that exchanges or holds the virtual currency fails or goes out of business…. The public should therefore desist from transacting in Bitcoin and similar products.”
This is a warning, however, and it doesn’t make cryptocurrencies illegal like other countries like China and Bangladesh have done. This doesn’t mean the country legitimizes it either. But it surely means one thing- they aren’t pleased with all this cryptocurrency idea. This is no reason for Kenyans to stop, as they’ve continued trading and holding cryptocurrencies. In fact, the country is estimated to currently hold more than 163 billion Kenyan Shillings’ worth of Bitcoin. This is in itself 2.3% of Kenya’s GDP.
With the stance of the Kenyan government on cryptocurrencies, Kenyans are left with little to no protection for their cryptocurrencies. One might think that since 2.35 of the country’s GDP is contributed by cryptocurrencies, that the government might want to revisit the stance, via their regulators, the CBK. Others also believe that it would even be a better option for the government to place an outright ban on cryptocurrencies like China and Bangladesh have done, rather than state half-hearted displeasure and watching its citizens go ahead with the digital currency anyway.
But whether or not they place a ban on cryptocurrencies, or they choose to regulate it, the number of cryptocurrency trades in Kenya is set to increase with an upcoming opening of BlockBank, which is a UK-based blockchain financial institution in Nairobi.
Many Kenyans have stated that cryptocurrencies provide for them a safer and more secure way of making transactions. Tony Mwongera, for example, the chief executive of Heathland Spa in Nairobi, claimed that he began accepting Bitcoin payments in 2018 in order to prevent theft. He was being robbed too frequently and he needed a safer way of transacting. The business has bloomed and flourished since then, and in an interview with BBC, they explained that they very much prefer the convenience of using cryptocurrencies to pay for purchases.
How Many Kenyans are Using Cryptocurrencies?
Despite the popularity of virtual currencies in Kenya, research has shown that only about 40,000 Kenyans have made transactions with cryptocurrencies. This is partly due to the fact that the Central Bank of Kenya has already stated its displeasure with cryptocurrencies and has forbidden banks from dealing in these virtual currencies.
Despite these, however, cryptocurrencies remain a safer and more secure way of transacting. Here are the most popular avenues in Kenya for getting cryptocurrencies and trading or investing in them:
This is a Kenyan platform created to help you easily access your cryptocurrencies and trade in them. With BitcoinKE, you’ll be kept abreast of the latest happenings in the world of cryptocurrency and you’ll know where exactly your money is going to.
You can check out their website here
This is another secure platform for you to convert and store your cryptocurrencies. It is easy, safe, and secure and they have over 30 million customers currently making use of the platform.
You can check them out here.
With Coindirect, you can buy bitcoin, Ethereum, ripple, or any other cryptocurrency of your choice. Here is their website for you to find out more.