According to a study by the United Nations (UN), 4.25 million people, or 8.5 percent of Kenya’s population, own digital assets. As a result, it leads Africa in the adoption of cryptocurrencies, with Ukraine taking the top spot globally with a HODLer population of 12.7%.
Kenyans’ Growing Interest in Crypto
Kenya, a country in Africa regarded as a hub for technology and innovation, has long been associated with the cryptocurrency market. During the COVID-19 crisis in 2020, the nation’s struggling citizens turned to regional digital assets (like Sarafu) to help with their financial problems.
Kenya is currently the top African country for HODLers, according to a recent UN study, and its interest in cryptocurrencies has grown over the years. According to the report, 4.2 million people, or 8.5% of the domestic population, own digital assets. In contrast, 6.3% of Nigerians and 7.1% of South Africans, respectively, own bitcoin or other cryptocurrencies.
It’s noteworthy that Kenya’s adoption rate of cryptocurrencies is higher than that of leading economies like the United States (8.3 percent ). However, because there is little regulation in the space, it is difficult to determine the value of digital currencies held by Kenyans:
As with other speculative trades, “the returns from cryptocurrency trading and holding are highly individual. Overall, the risks and expenses they present in developing nations outweigh them. The industry is not regulated in the nation and is still largely unregulated in the industrialized world.
According to a UN study, Ukraine is the world leader with 12.7% of its population having access to cryptocurrencies, followed by Russia with 11.9 percent. Singapore and Venezuela complete the top 4 with respective percentages of 10.3 and 9.4 percent.
Does Kenya Favor Bitcoin or CBDC?
Over the past few years, the shilling, the nation’s official currency, has lost a sizable portion of its purchasing power against the US dollar. On that note, Central Bank Governor Patrick Njoroge suggested that Kenya’s economic problems might be alleviated by using bitcoin last year:
“Our choice to switch to Bitcoin is tactical as well as logical. The IMF has consistently criticized our currency, claiming that the Kenyan Shilling is overvalued. We are suffering too much as a result of an IMF employee waking up on the wrong side of the bed. This will come to an end with Bitcoin.
The Central Bank of Kenya (CBK) argued earlier this year that a potential CBDC could improve cross-border payments and provide some advantages to the domestic banking system. The organization even published a discussion paper to investigate community support for such a product.
However, it is important to note that bitcoin and CBDCs are very dissimilar types of assets. CBDCs would be fully regulated and issued by governments and central banks, giving consumers less privacy while the main cryptocurrency remains decentralized.