According to the 2021 Global Crypto Adoption Index, Kenya topped the world in peer-to-peer (P2P) crypto transactions. In addition, Kenya is set to scale the adoption of cryptocurrencies in 2022. Most Kenyans do not understand what cryptocurrency entails and have not taken the time to do their research. Some conclude that cryptocurrencies are scams after relying on a social media post. However, negative perceptions of crypto can be washed away, though a lot needs to be done for Kenyans to benefit maximally from trading crypto.
For beginners, cryptocurrencies are digital assets or currencies that are hard to double-spend or create counterfeits. Cryptocurrencies work the same way as actual money, allowing you to buy things with crypto and receive crypto in exchange for your services.
Negative connotations that crypto can be used as a conduit for illicit financial flows such as money laundering, tax evasion, and funding crime continue to dog the sector. The connotations discourage Kenyans who would not like to be associated with a platform that can support illegal practices.
For cryptocurrencies to have a beneficial impact on trade, Kenya and other African countries must take the following steps to ensure easy and effective adoption of free trade.
Interested citizens should be offered crypto training. Although Bitcoin, the first cryptocurrency, was launched in 2009, only a few understand the subject of cryptocurrencies and blockchain. More crypto players need to join those already conducting training to empower citizens with the knowledge of the trade; it will help crypto beginners to make informed decisions about how to own and grow their crypto portfolio
Educating interested individuals would also empower them to differentiate between genuine crypto projects and scams. Institutions such as the Blockchain Association of Kenya should organize training programs for Kenyans to prevent losing money.
The government must also take a role in guiding crypto policies with a friendly and supportive stance. The Central Bank needs to go beyond cautioning Kenyans and provide a solution such as launching Central Bank Digital Currency (CBDC) backed by the government to give citizens much-needed trust and confidence. The issuance of a discussion paper to inform policy on CBDC is a good step and gives people an opportunity to contribute ideas.
A CBDC would spur trade since citizens and financial institutions would conduct their businesses effectively and efficiently. It will make transactions occur without involving intermediaries, as well as reduce the time and cost of transactions.
Instead of warning Kenyans against trading in crypto and even prohibiting the use of their debit cards in crypto transactions, local banks must find ways to accommodate clients who are interested in crypto. Local banks must consider adding value by giving their customers crypto offerings such as exchange (swapping) fiat for crypto, among others.
A trusted system is suitable for the trade. Cryptocurrencies operate on trust and transparency, and Kenyans who adopt crypto to trade can verify all transactions. In addition, the cost of trade would reduce because crypto trading eliminates paperwork.
Similar to how the world’s first mobile-money system (Mpesa) revolutionized trade in Kenya and beyond, crypto can facilitate exchange further by eliminating all barriers the former has. Crypto can enhance trade by removing limitations of transaction amounts. Citizens can order and pay for high-value goods worldwide with crypto without waiting for anybody or institutions to approve transactions.
By understanding cryptocurrencies thoroughly, Kenyans can diversify their investment portfolio by trading various cryptocurrencies. Staking to earn rewards and opening a crypto savings account are other opportunities Kenyans and corporate institutions can tap in.
Crypto presents enormous opportunities, including creating employment and facilitating trade. For example, Dubai is becoming a Crypto hub, and Nairobi should not be an exception.