Kenya is the African leader in crypto-adoption (Report)

A study by the United Nations (UN) found that 8.5% of Kenya’s population owns digital assets, which make up around 4.25 million people. This makes the country a leader in cryptocurrency adoption across Africa, while globally Ukraine ranks first, with 12.7% of the population as HODLers.

Kenyans’ growing appetite for crypto

Kenya – an African nation that is considered a technology and innovation center on the continent – has been associated with the cryptocurrency industry for many years now. In 2020, in the midst of the covid-19 crisis, the weary inhabitants of the country turned to local digital assets (such as Sarafu) to help with their money issues.

According to a recent UN study, Kenyans’ interest in crypto has increased in recent years, and it is currently the leading African nation when it comes to HODLers. The report stated that 8.5% of the domestic population, or over 4.2 million people, own digital assets. By comparison, 7.1% of South Africans and 6.3% of Nigerians have bitcoin or alternative coins.

It is worth noting that Kenya’s crypto-adoption rate surpasses top economies, including the United States (8.3%). However, due to the lack of supervision in the sector, it is difficult to determine the value of digital currencies held by Kenyans:

«The return on trading and holding of cryptocurrencies is, as with other speculative trades, very individual. All in all, they are overshadowed by the risks and costs they pose in developing countries. The sector is not regulated in the country and remains largely unregulated even in the developed world. “

UN research found that Ukraine is a world leader, with 12.7% of the population having exposure to crypto, while Russia is second with 11.9%. Venezuela and Singapore round the top 4 with 10.3% and 9.4% respectively.

Is Kenya against Bitcoin or CBDC?

The national currency of the country (shilling) has lost a significant part of its value against the US dollar in recent years. On that note, last year, central bank governor Patrick Njoroge said that switching to bitcoin could ease some of Kenya’s economic problems:

“Our decision to switch to Bitcoin is both tactical and logical. Our currency has always been the punching bag of the IMF, which always claims that Kenya Shilling is overvalued … We lose too much simply because someone in the IMF woke up on the wrong side of “Bitcoin will put an end to this.”

Earlier this year, the Central Bank of Kenya (CBK) claimed that a potential CBDC could provide certain benefits to the domestic banking infrastructure and improve cross-border payments. The institution even published a discussion paper to investigate whether the local population supports such a product.

However, it is worth mentioning that bitcoin and CBDC are very different assets. While the primary cryptocurrency is decentralized, CBDCs will be fully monitored and issued by governments and central banks, giving consumers less privacy.