Kenya’s central bank governor finally sees the push for Bitcoin
Governor of the Central Bank of Kenya, Patrick Njoroge, acknowledged that he was under external pressure from cryptocurrency enthusiasts to convert the country’s reserves into Bitcoin (BTC).
In a meeting with lawmakers on September 19Njoroge described the plan as “crazy”, adding that converting the assets to Bitcoin would be risky given the volatile nature of the digital commodity.
In addition, he suggested that legislators may be under pressure to influence the legislative process in favor of the introduction of cryptocurrencies.
Push to push crypto
Interestingly, the governor said he was willing to go to jail if the nation adopted Bitcoin during his administration. He stated,
“I know you’re under a lot of pressure from some of these people pushing these things [cryptocurrencies] because it’s good for them. I can assure you that I have many people who have pressured me to put our reserves in Bitcoin. <...> I would have been out of my mind with that kind of madness.”
Njoroge added that the nation could decide to adopt cryptocurrencies only if they provide a solution to a specific problem. To get away from the “hype” surrounding digital assets, he called for a review of the bitcoin market.
What problem in our economy are they addressing, he asked? He further stated,
“The answer is no, they are not superior vehicles for, say, payments or other activities. Whatever the problems are, are they better? The answer is no, the security does not outweigh your bank account. We perceive it as something that may be overhyped, but we have to examine it properly to determine whether or not it will solve a particular problem.”
Need for regulations
Notably, the Central Bank of Kenya has already warned citizens against using cryptocurrencies, citing the associated risks. In order to control the industry, there are still no comprehensive regulations.
In this case, the organization has largely sent circulars to regional banks advising them to exercise caution when interacting with cryptocurrencies or businesses dealing in digital assets.
A recent study showing that a record four million Kenyan crypto investors lost money as a result of the continued sell-off in the digital asset market highlighted the severity of the threats.
Despite this, Kenya is booming with crypto activities. While Nigeria is Paxful’s largest market globally, Kenya is currently the second largest market in Africa and the fifth largest market globally.
Kenya experienced P2P volumes of over $200 million in 2021 and over $125 million in the first half of 2022. Paxful continued: “We forecast a 25% increase in trade volume in Kenya for 2022.”
In response to the significant increase observed in Ghana and Kenya, Paxful stated,
“There are more and more African users sending money over the years – the total remittance user base (users transacting in multiple currencies) on Paxful grew by almost 140% in Kenya and over 115% in Ghana in 2021. In 2021, Ghana experienced annual growth of 95% in trading volume.”
