Business

Dennis Wafula

Crypto in Africa: Kenya, Uganda and South Africa crypto markets

As more eyes turn to Africa, countries in the region are stepping up to meet everyone’s expectation. Since last year, even with the recent prediction, countries in Africa had opened up their doors to embrace blockchain and its technology. Interestingly, even without governmental approval, there has been continuous support and use of cryptocurrencies all around Africa.

Crypto boom in Kenya despite restraints

Kenya is a perfect example of a booming crypto community despite holdbacks and lack of support from the authorities. The country is among the leading cryptocurrency market spaces in Africa. According to a recent report by the Blockchain Association of Kenya (BAK), the number of crypto transactions in the country is estimated to be worth more than $1.5 million.

People have continued to trade in cryptocurrencies despite warnings from the Central Bank of Kenya and other authorities. Following the increased use of cryptocurrencies, some businesses have started accepting Bitcoin Core (BTC) as payment for goods and services.

Reportedly, BAK is working to educate communities around the country, what is cryptocurrency and its benefits. Through this education, people have learnt that they can send and receive money to any place around the world without having to rely on the bank.

Additionally, people can quickly get cryptocurrencies through WhatsApp. David Gitonga, a crypto writer in Nairobi, explained that people had been drawn to this practice as it is an easy and fast means of doing it. He stated:

“The peer-to-peer market in Kenya is pretty huge. WhatsApp is mostly the preferred form of trading due to ease of communication and speed. The community already has a recognized list of traders that offer the services. Anyone looking to buy or sell crypto is likely going to go through these traders. For large transactions, most sellers and buyers meet face-to-face once they’ve been introduced to each other on WhatsApp.”

Uganda’s crypto community quickly catching up

Uganda, a new player in the crypto market in Africa, is working hard to catch up with leading countries in the space. According to the 2018 Global Innovation Index, Uganda ranks number 10 in Africa and 103 globally in terms of blockchain adoption.

The crypto community in Uganda has seen tremendous growth following the launch of Binance cryptocurrency exchange. Reportedly, days after its launch, the exchange attracted over 40,000 users.

According to reports, the increased adoption of cryptocurrency in the region has been due to a lack of access to banking services. Only 17% of people in the country are banked.

In addition, some like Robert Bagarogo, a crypto hobbyist have started an awareness campaign called “the gospel of Bitcoin”. While speaking to reporters, Bagarogo admits that he has made more in a year with crypto trading than he had made in his career as a university lecturer. He explained that he could hardly make ends meet, but ever since he discovered cryptocurrencies, things have changed for the better.

Another factor contributing to crypto growth in the country is large youth numbers. Currently, youth form 55% of Uganda’s population. Youth in the country, following Prince Kundra Kalema footsteps, have decided to adopt cryptocurrency.

Blockchain-based technologies are also finding their ways into the core of Uganda. Just recently, Johannesburg-based Carico Café Connoisseur began using blockchain technology to streamline its operations. The company is using this stem for its coffee supply chain.

Governor of SARB liken crypto to a Ponzi scheme

Lesetja Kganyago, the governor of South Africa’s Reserved bank, stated recently that his government has no intention of recognizing crypto assets as being legitimate financial instruments.

According to a recently released statement, Kganyago stated that cryptocurrencies are not volatile. He adds that crypto does not meet the requirements that are fulfilled by regular currencies. He said that the crypto market is a “sophisticated Ponzi scheme.”

The governor made this remarks while he was responding to a question posed by a student during the “Nedbank-Old Mutual Budget Speech Competition” that was held in Cape Town.

The student asked the governor whether or not he cryptocurrencies could have a positive impact on the South African economy. Kganyago officially replied by stating:

“There’s no such thing as a cryptocurrency. A currency must meet the following criteria, it must be recognized as a store of value, it must be accepted as a medium of change, and these crypto things are not. They are only valid amongst the people who think they are clever, that they have got a head start in a convoluted sophisticated pyramid scheme.”

He added that for an asset to be termed as a currency it “must become a unit of accounts” and it must also meet regulatory criteria.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as SegWitCoin BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins. Altcoins, which value privacy, anonymity, and distance from government intervention, are referenced as dark coins.

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