What Country Is Africa’s Silicon Valley When It Comes To Cryptocurrencies?
The use of cryptocurrencies in Africa has risen after the past few years. A major problem for most African countries before now was accessibility. Due to less sensitization of how the blockchain works, not many startups were willing to adopt the technology and those interested found it difficult to lay hands on bitcoins and other cryptocurrencies.
Besides, Ponzi and other dubious schemes that involved putting money on the internet had caused major financial losses; people were finding it difficult to invest money in what they don’t fully understand.
Well, that is changing and the Bitcoin community in Kenya is playing a major role in the revolution. The country happens to be Africa’s Silicon Valley when it comes to cryptocurrencies and you’ll understand why.
Silicon Valley is home to top tech companies like Apple, Google, and Facebook. These companies changed the game in their respective digital niche. Thankfully, Kenya is doing the same for the crypto industry in Africa.
First off is the Blockchain Association of Kenya.
Blockchain Association Of Kenya
There might be some other cryptocurrency association in other Africa countries, but none is as influential as the Blockchain Association of Kenya aka BAK. As mentioned earlier, less sensitization is a major problem in crypto adoption and the BAK is out to fix that.
BAK was founded in 2017 and the mission of the organization is to promote the adoption of cryptocurrencies and blockchain technology, not just in Kenya, but across East Africa.
It is a non-profit organization covered by the Societies Act Cap 12 Laws of Kenya and with a headquarters in Nairobi. The Blockchain Association of Kenya looks to sensitize Africans about the blockchain industry.
What About Regulation?
There is yet to be regulation for cryptocurrencies in Kenya, similar to most African countries. In fact, the country’s apex bank and the Capital Markets Authority (CMA) did warn citizens from investing in cryptocurrency. This was in early 2018, around the time when the kenicoin cryptocurrency was launched.
The government’s stance is that if anything should go wrong with crypto exchanges and trading platforms, victims would lose out as no protection exists. Again, the argument is due to the anonymity of bitcoin transactions because it is perceived as the go-to money transfer medium for criminals and money launderers.
This can be attributed to the fact that the problem of accessibility has been eliminated. Kenyans now have access to several crypto trading platforms and exchanges. This includes the likes of Paxful, Localbitcoins, Coindirect, and Bitpesa.
Several businesses now accept bitcoin payments and this shows that the fear of illegitimacy is gradually fading. A significant boost in the movement for crypto adoption was the support for bitcoin by M-Pesa.
M-Pesa and Bitcoin
M-Pesa is a mobile money transfer service in Kenya which was launched in 2007. It is owned by Safaricom and Vodafone. According to a guide to forex trading in Kenya using mpesa, the platform is one of the most successful money transfer service in the world and currently records more than 35 million users.
M-Pesa is active not just in Kenya but also in Ghana, Egypt, DR Congo, Mozambique, Tanzania, Lesotho, and India. People can send money in and out of Kenya even without owning a bank account; they just get charged a minimal fee per transaction.
Kenyans who use M-Pesa can now conveniently buy bitcoin with funds in their accounts. M-Pesa works with Paxful, LocalBitcoins, and BitPesa, which are already popular crypto platforms in the country. On these crypto platforms, M-Pesa is typically among the list of accepted payment gateways.
Kenya’s contribution to crypto adoption in Africa cannot be overestimated. From the BAK to the M-Pesa’s support for bitcoin purchases, investing with cryptocurrencies in East Africa has never been easier.
However, the major problem in the country – as it is with most African countries where bitcoin is used – is the problem of regulation. The Kenya government and the Central Bank are providing no support in the adoption of cryptocurrencies; in fact, they are posing a major resistance.
For example, banks are forbidden from handling transactions that involve dealing with digital currencies. If you intend to be a crypto dealer, you cannot open a bank account, which makes it difficult for bitcoin merchants to convert crypto to fiat. Fortunately, M-Pesa’s support has changed this.
Bitcoin and cryptocurrencies are here to stay. The decentralization of the blockchain may make it difficult to regulate but that doesn’t make it impossible; the CMA currently regulates Forex trading, just like cryptocurrencies were not given support at first. If the government will cooperate with the BAK, a legal framework can be developed.