Kenya makes a U-turn, warms up to blockchain

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The government has established a taskforce to look into potential applications of the technology.

Last year, the Kenyan government warned the public about cryptocurrencies, but this year it looks like they’re warming up to the concept of blockchain, at least.

In a press conference, ICT cabinet secretary Joe Mucheru announced that the government is establishing a taskforce of 11 members to assess the potential of blockchain technology and artificial intelligence, including the challenges associated with them. He noted that blockchain has a lot of implications for the land and education sector, citing land ownership verification as one of its possible uses.

Mucheru was a former lead at Google, and played a significant role in building up the company in Africa, and was stationed in Google’s Nairobi office. And he’s a strong advocate of allowing and regulating cryptocurrencies.

This is a positive development for cryptocurrencies and blockchain technology in the country, since Kenya wasn’t exactly receptive of the concept before. Last year, Kenya’s central bank issued a stern warning to the public, saying cryptocurrencies are risky and that the government cannot protect its citizens from potential losses. In 2015, the central bank governor wasn’t too keen on it either.

“It could very well be a Ponzi scheme of a kind, I think you have seen how the prices have gone up and down in various places,” central bank governor Patrick Njoroge said back then.

In a report by Quartz Africa, Blockchain Association of Kenya chairman Michael Kimani says that banning cryptocurrencies only makes the black market thrive, and makes it harder for authorities to keep up—something the government may be finally realizing with Mucheru on their side. “When they ban it or say you can’t build a business that allows you to convert Kenya shillings to cryptocurrencies, the informal market thrives,” he says. “And once it goes informal, it becomes harder and harder [to regulate],”

This recent turn breaks Kenya away from neighbouring countries that have similarly expressed an aversion to blockchain technology to this day. Egypt, Nigeria, and Tanzania have publicly warned against cryptocurrencies early this year, and their position might not change for a while. On the contrary, South Africa has been big on blockchain tech, birthing several notable start-ups and hosting several blockchain events.