As the Crypto phenomena have rocked the world in the last few years, virtual currencies have also been successful in gaining interest in the African Continent. The special hub of attraction is Kenya, Africa’s Silicon Valley.
Though Kenya’s Central bank has advised against the Crypto market showing the volatility as the reason, some business is still accepting payments in Bitcoin. According to the Blockchain Association of Kenya, the total numbers of Bitcoin transactions in Kenya are estimated to be worth over $1.5m. But there are still questions on whether the technology has the capacity to take off.
It should be noted that Crypto-currencies are virtual money that can be used to pay for things in the real world, such as a hotel room, food or even a house. Digital Token in terms of money are stored in online wallets and can be sent anonymously between users.
Cryptocurrencies are being operated on a technology called Blockchain. It is a ledger of blocks of information, such as transactions or agreements that are stored across a network of computers.
In the Blockchain technology, the information is stored chronologically and is designed to be de-centralized and tamper-proof. Though it provides security, it also means there is no oversight from a central authority such as a bank or a government.
It should be reported here that the first-ever blockchain-backed currency developed was Bitcoin, and it continues to be the most widely used globally.
In the African Continent, at this moment, the crypto-currencies Bitcoin, Dash, and Lisk are used in Botswana, Ghana, Kenya, Nigeria, South Africa, and Zimbabwe.
The blockchain is also getting implemented by start-ups and tech conglomerates alike in Kenya to help solve problems, such as IBM’s platform to help small businesses for proving their creditworthiness for availing loans.
Tony Mwongera, the chief executive of Healthland Spa in Nairobi, began accepting Bitcoin payments in 2018. He told the BBC,
”I decided to adopt the use of crypto-currencies because there was so much theft in my business.”
“So I said, let me use a way that can be safe, secure and I can also embrace technology.”
Healthland Spa customers told in an interview that they liked the convenience of using crypto-currencies to pay for purchases.
However, looking at the total number of people in Kenya using virtual currencies today, it is still relatively small. As of now, only a minuscule 40000 people have ever made a transaction using Bitcoin.
Part of the reason for less usage of the cryptocurrency is because Kenya’s central bank has forbidden banks from dealing in virtual currencies.
In Kenya, banks are not permitted to open accounts for people who are known to dealing in any virtual currency. It means the bitcoin traders cannot easily convert Bitcoin payments into cash or mobile money.
Economist and policy expert Vincent Kimosop said in the interview to BBC,
“Crypto-currencies can facilitate and ensure that you do an unlimited number of transactions; however, the volatility, lack of control and the non-acceptability of crypto-currencies across different jurisdictions impairs what you’d expect a currency to do.”
The Blockchain Association of Kenya (BAK) is trying to build a consensus against this way of thinking, and it is actively working to educate the country on the benefits of using crypto-currencies and blockchain.
BAK, a non-profit body, says that using virtual currencies can greatly reduce the cost of transactions, and enable people without bank accounts to quickly make and receive payments.
As per BAK, there are many things Kenyans have realized they can use Bitcoin for – whether it is to pay merchants in China for goods, or to enable Nigerians to pay to send their children to school in Kenya or to enable young African freelancers to be easily paid for their work online.
It is really a good sign that the reach of cryptocurrency is now not limited to only first world countries. But, countries like Kenya have a long way to go with rising speculations in the market.