On September 6, 2018, Kenya’s Institute of Economic Affairs (IEA) is hosting a public forum to examine the current regulatory framework for cryptocurrencies operating in Kenya. At the moment the Central Bank of Kenya does not approve of digital currencies in spite of great regional interest.
Applications in the Public and Private Sphere
The IEA is a think-tank which hopes to influence public policy in Kenya. The hope is that the IEA can steer Nairobi towards the creation of a legislative framework which encourages the development of a crypto ecosystem that brings greater wealth to Kenya while protecting it from the risk endemic to digital currencies. Clearly, the Central Bank of Kenya is moving slowly in an attempt to hedge against difficulties in implementation of a central digital fiscal policy.
Cryptocurrency has a large number of applications in private enterprise as well as public sector endeavors. However, the environment in Kenya faces similar struggles in promoting adoption and utilization. Public trust is key in introducing digital currencies into an economy, and that trust is damaged by the consistent fluctuation of Bitcoin market capitalization as well as the notorious pump and dump schemes which have plagued the space.
Kenya has warmed to the blockchain technology which underlies cryptocurrencies. Most recently, regional tensions, difficult elections, and reduced interest rates have created a poor national banking environment.
Interest in East Africa
Many banks are now looking to blockchain technology in order to increase efficiency and reduce cost. However, the Central Bank of Kenya has yet to approve of the technology or digital currencies, though it is seen as a natural progression in the bank’s policy.
There is a great amount of interest in cryptocurrency and blockchain technology in East Africa, but governments are slow to warm to adoption. Groups like the IEA are essential to operating as intermediaries between the public and private sector. There is a great deal of misunderstanding about what blockchain and digital currencies can and cannot do. The IEA sees their upcoming forum as the perfect place to lay out essential information for all parties involved so that an informed decision can be made without exposing the population to undue risk.