According to reports from the BBC, Bitcoin (BTC), DASH and Lisk (LSK) are the most widely used cryptocurrencies in Kenya and in other African countries such as Ghana, Nigeria, Zimbabwe,
It is known that in recent years the governments of African countries have implemented strong restrictions to their citizens regarding the use of cryptoactives. In the case of the Republic of Kenya, the Government and the Central Bank of that country have had important discussions about how to regulate and manage these assets in their territory.
In Kenya, the Capital Markets Authority (CMA), which is in charge of regulating financial matters, has warned its citizens in all possible ways about the “risk” of having or using these assets. In addition, the Government has reported that it is not responsible for scams and value drops of cryptocurrencies in the global market.
However, and with respect to these warnings and suggestions, the crypto markets in these countries continue to increase. In fact, some commercial establishments accept payments in cryptocurrencies such as Bitcoin (BTC) or DASH.
It is believed that the main reason for the boom this new technology is having in that country is due to the instability of its economy as well as the constant financial crisis it is going through. This has led many of their citizens to choose to manage their savings and invest their money in cryptocurrencies. According to economic reports, in countries such as Kenya is difficult for their citizens to enter the local banking and financial system.
Faced with warnings from the Government and the Central Bank, many big businessmen have had doubts about whether to enter the crypto market. Despite this, small and medium businesses have allowed the use of this global financial tool as an instrument of growth and stability.
One example of this is Tony Mwongera, who is Executive Director of a spa in Nairobi, in Kenya’s Capital. Mwongera says that his business has had an important income since he implemented the cryptocurrency payment system.
In addition, the executive details that this has served to keep more secure the money which goes into his business to keep his finances in a financial system or in a much more stable currency than the local one and sheltered from insecurity. “I decided to adopt the use of cryptocurrencies because there was a lot of theft in my business (…) So I said, let me use a form that can be safe and that can also adopt the technology”, he says.
About the official data on the handling and volume of transactions in Kenya, LocalBitcoin showed statistics regarding the increasing transactions that take place in that country. According to these data, on February 16th of this year there was a commercial flow of approximately 29,701,339 Kenyan shillings, equivalent to about 297,000 US dollars.
With respect to the regulation and management of cryptocurrencies in the African country, Paul Muthaura, Executive Director of CMA, assures that cryptoactives are not completely prohibited in that country and that the institution supports the use of this tool and encourages its implementation.
However, he clarified that, as an institution, he cannot participate in projects related to cryptoactives. “In the validation we have 70 companies, some from outside of Kenya. Blockchain firms will be considered whilst they are not dealing with cryptocurrencies since the mandate of the CMA does not extend to the currency”, he concluded.
By María Victoria Rodríguez