As the BBC itself reports, Bitcoin is becoming more and more popular in Kenya. To be fair, interest in digital currencies is rising across the African continent. Nevertheless, Kenya stands out. Despite warnings from the Kenyan central bank about the volatility of crypto currencies, some companies in Nairobi now accept Bitcoin payments. And Kenya is digital, Kenya is often referred to as Silicon Valley of Africa.
The total number of Bitcoin transactions in Kenya is estimated by the Blockchain Association of Kenya at over USD 1.5 million. But can the technology really take off?
Currently, the crypto currencies Bitcoin, Dash and Litecoin are mainly used in Botswana, Ghana, Kenya, Nigeria, South Africa and Zimbabwe. Blockchain technology is also used by start-ups and tech conglomerates in Kenya to solve problems such as an IBM platform that helps small businesses prove their creditworthiness for loans.
Prevent theft with Bitcoin!
Tony Mwongera, Managing Director of Healthland Spa in Nairobi, has been accepting Bitcoin payments since 2018. Mwongera tells the BBC:
“I decided to use crypto currencies because there was so much theft in my shop. So I said, let me go a way that’s safe and I can use technology. Meanwhile we also use Bitcoin to pay for purchases.”
But if you look at the total number of people using virtual currencies in virtual currencies today, it’s still relatively small in Kenya – only about 40,000 people have ever made a transaction with Bitcoin.
Banks fighting Bitcoin in Kenya
One reason why the penetration of the crypto currency is not increasing further is that the Kenyan central bank is banning banks from trading virtual currencies.
Banks are not allowed to open accounts for people who are known to trade a virtual currency. This means that the population cannot easily convert Bitcoin payments into cash or mobile money.
“Crypto currencies can allow an unlimited number of transactions and ensure that the volatility, lack of control and non-acceptance of crypto currencies in different countries affect the effect of one currency.
said economist political expert Vincent Kimosop to the BBC.
The Blockchain Association of Kenya (BAK) disagrees with this way of thinking and is actively working to inform the country about the advantages of crypto currencies and blockchain. The non-profit organization explains that the use of virtual currencies can significantly reduce transaction costs and enable people without bank accounts to make and receive payments quickly.
According to the Blockchain Association of Keny, there are many things that Kenyans can use Bitcoin for, be it to pay merchants in China for goods, to enable Nigerians to send their children to school in Kenya, or to simply pay young African freelancers for their work online.