Altcoin Market in Kenya
The Cryptocurrency market in Kenya is largely unregulated. This unregulated nature of cryptocurrency has created questions regarding the risks associated with investment. The nature of the digital currency, borderlessness, anonymity, and price volatility makes it difficult for regulators to balance risk management and regulation. Moreover, the Kenya government has been largely resistant to cryptocurrency adoption.
Cryptocurrency trade volume in Kenya
Cryptocurrency trade volume in Kenya has increased by a factor of five since 2017. Kenyans have been flocking to cryptocurrencies in recent years. The internet-savvy nation is at the forefront of digital currency platforms where individuals can trade among themselves. According to Chainalysis’s Global Crypto adoption index (2021), the country is among the top countries for peer-to-peer exchange trade. The index adjusts for factors such as purchasing power parity per capita and internet usage.
While Kenya’s Central Bank has not yet adopted specific regulations for cryptocurrency, the country’s banking sector has warned Kenyans of the risks. It said that the volatile nature of crypto and the lack of specific regulation of the currency make it a high risk asset. As a result, the CBK has advised its public not to trade cryptocurrencies. However, despite these guidelines, crypto trade is not illegal in Kenya. In fact, Kenyans hold more than $1.5 billion worth of Bitcoin, equivalent to 2.3% of the country’s GDP. The figure does not include other cryptocurrencies like Ethereum and Dogecoin.
Central bank of Kenya considering digital currency as reserve currency
In an effort to address the country’s growing financial crisis, the Central Bank of Kenya is considering the use of bitcoin as a reserve currency. Governor Patrick Njoroge says the decision was made after considering a number of factors, including the depreciation of the shilling, increased velocity of money, and shortage of foreign currency reserves.
In the first instance, CBDC may not render banknotes obsolete, but it would require the CBK to revamp its regulatory framework. For instance, PSPs would no longer hold CBDC as part of their assets. This could lead to financial and physical technicalities. Another issue is the possibility of conflict with the banking sector.
The central bank of Kenya recently released a discussion paper on CBDC. While it would focus on reducing transaction costs, its primary objective would be to improve cross-border payments. It would also promote innovations and payment interoperability.
Bitpapa enters Kenyan crypto market
Bitpapa has launched in the Kenyan crypto market and is offering customers the opportunity to trade Bitcoin for Kenyan shillings. The P2P exchange offers an easy-to-use mobile application and Telegram bot. Its users benefit from a secure environment, easy registration and no phone verification. Once their account is activated, customers can start trading immediately. There is no limit to the number of trades they can make on a daily basis.
Kenya is one of the few African countries where P2P exchanges have become the popular choice for consumers. The country is one of the world’s leaders in the adoption of P2P cryptocurrency exchanges. Since 2018, Bitpapa has been providing P2P cryptocurrency buying and selling services to users.
The new exchange has entered the Kenyan crypto market with a telegram bot and a secure P2P environment. Kenyans can now trade Bitcoin with each other in a safe and secure environment. Additionally, users can also send and receive Bitcoin to and from other Bitpapa users.