What is driving Kenya’s Bitcoin demand?

 

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Enterprising young Kenyan have figured out they can use bitcoin as a payment mechanism to take part in global online commerce . They buy bitcoin from a peer to peer market (here) and use it to pay for stuff online. For as little as 200 KES, they can purchase $ 2 worth of Bitcoin to make micro payments to their favorite sports bet pickers.

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Why Kenyans rush to cash, when banks go bust

Banking Crisis
Just now, Kenya’s #CoopBankTradingScam is trending on Twitter, and already, people are touting cash as a safer option

“If #CoopBankTradingScam goes on I bet people will panic just like Chase Bank & withdraw their cash. Co-op Bank could collapse by 4p.m!”

Kenya’s current recent banking crisis, if I may call it that, is a long list of 32 banks that fell to the wayside since 1988. Almost always, there is never enough cash to give. The reason is, all the money held in banks is debt, a string of electronic digits that says the bank owes you money. As we transition from cash to electronic money, we face a wider systemic risk.

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Emerging Regulatory Issues on Digital Currencies in Kenya

Digital currencies

 
A couple of days ago I perused the Kenyan NATIONAL PAYMENT SYSTEM ACT (No. 39 of 2011)THE NATIONAL PAYMENT SYSTEM REGULATIONS, 2014 (pdf). My interest was the legal stance on issuance of P2P exchangeable assets, such as loyalty reward points in Kenya, on the bitcoin blockchain – a decentralized network. At Umati Blockchain Ltd, we are exploring using the coloured coins protocol (for now)  for issuing freely exchangeable loyalty points, with all the ease, nifty features and security of the bitcoin blockchain.

It seems, to me, digital currencies such as bonga points, and cryptocurrencies such as bitcoin, fall in a gray area. They do not fit the strict definition of E-money under Kenyan law. Perhaps why, late last year, the Central bank of Kenya admitted via a public notice ‘Virtual currencies such as Bitcoin are forms of un-regulated digital currency not issued or guaranteed by any government or central bank.’ I subsequently wrote a rebuttal to this notice.

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Why I am bullish on Bitcoin and why you should be too

Bitcoin is yet to resonate with mainstream investors and the average (wo)man as a neo-asset class. I think if you have heard about bitcoin, you would be foolish not to dip a toe. Bitcoin, is a great proxy investment at potentially, the greatest innovations of our age, the internet of money.

Bitcoin Price 2

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