For quite some time, the cryptocurrency business has had ties to Kenya, an African country often regarded as a tech and innovation hotspot on the continent. While the country was in the midst of the COVID-19 crisis, those who were already struggling financially looked to local digital assets (like Sarafu) for relief.
The number of crypto enthusiasts in Kenya has skyrocketed in recent years, and the country now ranks first in Africa among HODLers.
Among major economies, Kenya’s crypto adoption rate is higher than that of the United States (8.3%). Yet, because to a lack of regulation in the industry, it is difficult to estimate the worth of digital currencies held by Kenyans.
Why Kenya leads in peer-to-peer crypto trade
Peer-to-peer (P2P) transactions involving cryptocurrency are more common in Kenya than anywhere else in the world. People in other African countries are also eager to take advantage of this development in order to protect their remittances and cross-border enterprises from the potentially disastrous effects of high transfer fees and a depreciating currency.
According to recent research, cryptocurrency in Kenya has the highest rate of peer-to-peer exchange commerce of any country in the world, with its citizens using digital currency platforms to buy and sell directly with one another. The number of people who use the internet and their spending power per capita are both factored into the index.
The threat of devaluing African currencies due to the after-effects of the global pandemic has rattled efforts to re-open economies, which is said to have contributed to the trend.
This may indicate that people in Africa are more interested in using peer-to-peer (P2P) platforms to conduct international financial transactions. It can be quite expensive to send money internationally from Africa, and trade is typically restricted.
Other factors and considerations
Non-custodial P2P exchanges give consumers complete access to their cryptocurrencies by providing them with a wallet. After that, clients can engage in peer-to-peer bitcoin trading using cash.
The Central Bank in Kenya has made it impossible for users to send money to cryptocurrency firms from their bank accounts by establishing regulations or advising banks not to accept these transfers, hence P2P exchanges have become quite popular in these countries.
When it comes to cryptocurrencies and the companies that deal with them, the Central Bank of Kenya (CBK) has already issued circulars urging Kenyan banks not to get involved.
The major provider of Mpesa’s mobile money gateway services, Safaricom, has repeatedly refused to do business with any company that deals in virtual currencies.
As a result, many of Kenya’s P2P exchanges take place in unstructured group discussions on messaging apps like WhatsApp and Telegram.
Final Thoughts
As long as locals have problems that cryptocurrencies have already shown to solve, like keeping their savings safe during economic volatility and making international transactions possible in countries with tight capital controls, we anticipate that the use of cryptocurrencies will continue to rise in Kenya and throughout sub-Saharan Africa.
