Following bitcoin’s birth te 2009 spil a decentralized peer-to-peer payment network with quick transaction speeds and low transaction fees, one of its most predicted future application uses wasgoed for international remittance purposes. Many experts envisioned that bitcoin would be a driving force ter reducing the costs of international money transfers to developing regions such spil Sub-Saharan Africa and, thereby, create more financial inclusion for the unbanked.
While anticipated bitcoin remittances into Africa have still not taken off at a large scale, Africa has birthed several local Bitcoin economies spread across the continent.
Te this article, you will be introduced to the state of bitcoin ter Kenya to give you an insight into East Africa’s leading bitcoin hub.
Kenya’s Bitcoin Ecosystem
Kenya is among the four main Bitcoin economies te Africa next to South Africa, Nigeria, and Ghana. While bitcoin awareness and adoption are growing ter many parts of Africa, only the countries mentioned above offerande Bitcoin ecosystems that include startups, meetups, a local Bitcoin community, and bitcoin liquidity.
Kenya is the huis to several bitcoin startups, regular bitcoin meetups, a blockchain-focused coworking space and accelerator, a population used to making mobile payments, and an enlargening request for bitcoin according to LocalBitcoins trading volumes.
You cannot talk about Bitcoin te Kenya without mentioning Kenya’s bitcoin startup poster child BitPesa. BitPesa wasgoed launched te 2013 with the aim to provide individuals and business with the chance to make low-cost international money transfers to and from Sub-Saharan Africa by leveraging the cryptocurrency bitcoin.
BitPesa has so far managed to raise overheen $6 million from leading blockchain-focused venture capital firms, including Blockchain Capital, Draper Associates, Digital Currency Group, and BitFury Capital, to grow its business and expands into fresh markets. BitPesa presently operates te Kenya, Uganda, Tanzania, Nigeria, Democratic Republic of Congo, Senegal spil well spil the UK and can process cross-border payments te overheen 30 currencies.
When BitPesa very first commenced out, it focused on remittances for private individuals but has since switched its business prototype to concentrate primarily on B2B cross-border transactions. This decision wasgoed partly a result of BitPesa’s quarrel with Kenya’s leading telecoms company Safaricom, which switched off BitPesa’s access to its mobile money toneelpodium MPesa that it wasgoed using to turn bitcoin remittances into fiat currency for everyday users. BitPesa went to court against Safaricom to regain access to its mobile money toneel but lost the case.
Nonetheless, through refocusing its business on B2B cross-border payments and by expanding into other regions te Africa, the BitPesa success story proceeds, and its latest $Two.Five million funding round from January 2018 is a wilsbeschikking to that.
The Central Bank’s View on Bitcoin
Following the BitPesa vs. Safaricom court case ter December 2015, the Central Handelsbank of Kenya (CBK) issued a public warning against buying bitcoin by taking out newspaper ads to inform the public. The notice stated:
“virtual currencies such spil bitcoin are not legal tender te Kenya and therefore no legal protection exists te the event that the podium that exchanges or hold the virtual currency fails or goes out of business…”
The CBK also suggests that the anonymous facet of bitcoin transactions make them, “…susceptible to manhandle by criminals te money laundering and terrorism financing.”
Since then, the Kenyan central canap has issued no official guidelines or public clarification on the use of bitcoin and other digital currencies.
At a meetup te Nairobi te summer of 2016, a leading member of Kenya’s Bitcoin community stated that the Kenyan Central Handelsbank had informed local banks not to conduct business with bitcoin startups. Existing bitcoin startups have had their handelsbank accounts shut down, making it very challenging for fresh bitcoin startups to open company bankgebouw accounts ter Kenya.
Kenya’s Blockchain-focused Coworking Space and Incubator
Te 2016, BitHub.Africa launched East Africa’s very first bitcoin and blockchain-focused coworking space and startup incubator ter Kenya’s capital, Nairobi.
Former BitPesa employee John Karanja founded BitHub.Africa ter 2015 with the aim to become a center of excellence for blockchain technologies ter Africa. BitHub.Africa offers two coworking spaces, an incubator for startups that are looking into developing blockchain-based solutions, and consultancy services for companies interested te learning more about blockchain technology.
Silicon Savannah Creates Promising Breeding Ground for Bitcoin, but Progress is Slow
The fattest hindrance for bitcoin adoption ter Africa is the low level of internet invasion. Presently, internet invasion ter Africa stands at 26.Three procent, but internet connectivity is mainly found ter the major cities and is clustered across a few of Africa’s larger economies.
Kenya has the highest internet invasion, 66 procent, ter Africa and is also one of the two leading Sub-Saharan countries ter internet and telecommunication development next to South Africa. Consequently, the capital Nairobi has turned into a hub for tech startups, dubbed spil Silicon Savannah. Furthermore, Kenya is leading Africa te mobile payment adoption with 86 procent of households having mobile money accounts according to McKinsey.
While thesis factors rondbrenger for a good breeding ground for bitcoin startups, only a few entrepreneurs are presently leveraging blockchain technology to develop solutions ter Kenya. Aside from BitPesa and Bithub.Africa, other Kenyan blockchain startups include Remitano and Umati Blockchain.
Regarding merchant adoption, there is little to none ter Kenya. According to CoinMap, a podium that collates and lists merchants that accept bitcoin, there are presently only seven vendors accepting bitcoin payments. Two travel agents, two tech companies, and three e-commerce stores.
Talking to several members of Nairobi’s Bitcoin community, they say that the main people using bitcoin are the youthfull tech-savvy generation that is either receiving bitcoin spil payments for freelance work or are buying bitcoin ter an attempt to make an investment profit. Private peer-to-peer remittances using the cryptocurrency have not become a common occurrence ter Nairobi.
With an unclear regulatory stance on bitcoin and the low level of bitcoin awareness and adoption, foreign blockchain startups are unlikely to come in the Kenyan market anytime soon. Local rente ter the cryptocurrency is undoubtedly on the rise, but like everything ter this part of the world, it will take a little while longer for bitcoin to become a “thing” te Kenya.