Kenya’s Central Bank Governor, Patrick Njoroge, acknowledged he was under external pressure from cryptocurrency enthusiasts to convert the nation’s reserves into Bitcoin (BTC).
At a meeting with lawmakers on September 19Njoroge described the plan as “insane,” adding that given the volatility of the digital commodity, converting the assets into bitcoin would be risky.
Additionally, he hinted that lawmakers may be under pressure to influence the legislative process in favor of cryptocurrency adoption.
Pressure to push crypto
Interestingly, the governor said he was willing to serve time in jail if the nation adopted bitcoin during his tenure. He explained,
“I know you’re under a lot of pressure from some of these people who are pushing these things [cryptocurrencies] because it is good for them. I can assure you that I have many people who have pushed me to invest our reserves in Bitcoin. <…> With such madness I would have gone mad.”
Njoroge added that the nation could only decide to adopt cryptocurrencies if they offer a solution to a specific problem. In order to escape 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 explained
“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, its security does not outweigh that of your bank account. We see it as something that might be overrated, but we need to examine it closely to determine whether or not it would solve a particular problem.”
need for regulations
The Central Bank of Kenya, in particular, has already warned residents against using cryptocurrencies and the risks involved. However, there are no comprehensive regulations to control the industry.
In this case, the organization has mainly sent circulars to regional banks advising them to exercise caution when dealing with cryptocurrencies or companies dealing in digital assets.
A recent study showing that a record four million Kenyan crypto investors lost money as a result of the ongoing digital asset market sell-off drew attention to 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 saw over $200 million in P2P volume in 2021 and over $125 million in the first half of 2022. Paxful continued, “We forecast a 25% increase in trade volume in Kenya in 2022.”
In response to the significant increase observed in Ghana and Kenya, Paxful stated:
“There has been an increasing number of African users sending money over the years – the total remittance user base (users trading in multiple currencies) on Paxful grew by almost 140% in Kenya and over 115% in Ghana in 2021. In 2021, Ghana witnessed a 95% annual growth in trade volume.”
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