Governor of the Central Bank of Kenya, Patrick Njorog, Admitted that he was under external pressure from cryptocurrency enthusiasts to convert the national reserves into Bitcoin (BTC).
in a Meeting September 19 with lawmakersNjoroge described the plan as “crazy,” adding that switching assets into bitcoin is risky given the volatility of digital commodities.
Additionally, he hinted that lawmakers could face pressure to influence the legislative process to support cryptocurrency adoption.
Pressure to push cryptocurrencies
Interestingly, the governor said he would be willing to go to jail if the country adopted Bitcoin during his administration. He says,
“I know you’re under a lot of pressure from some of the people pushing these things [cryptocurrencies] Because it’s good for them. I can assure you that I have a lot of people who have been pushing me to put our reserves into Bitcoin. <...> I would lose my mind with that madness. “
Njoroge added that the country can only decide to adopt cryptocurrencies if they offer a solution to a specific problem. To shake off the “hype” surrounding the digital asset, he called for a scrutiny of the bitcoin market.
He questioned, what problems are they solving in our economy? He further stated,
“The answer is no, they are not superior tools for payments or other activities. Whatever the question is, are they better? The answer is no, it is no more secure than your bank account. We think it may be overstated , but we do need to check it properly to see if it solves a problem.”
Notably, the Central Bank of Kenya warned residents against using cryptocurrencies, citing the associated risks. However, in order to control the industry, there are not any extensive regulations.
In this case, the group sent notices primarily to regional banks advising them to exercise caution when interacting with cryptocurrencies or businesses dealing with digital assets.
A recent study showed that a record 4 million Kenyan cryptocurrency investors lost money due to the ongoing sell-off in the digital asset market, drawing attention to the seriousness of the threat.
Nonetheless, cryptocurrency activity in Kenya is booming. While Nigeria is Paxful’s largest market globally, Kenya is currently the second largest market in Africa and the fifth largest globally.
P2P transaction volume in Kenya will exceed $200 million in 2021 and $125 million in the first half of 2022. Paxful continued, “We expect Kenya’s trade volume to grow by 25% in 2022.”
Responding to the substantial growth observed in Ghana and Kenya, Paxful said,
“Over the years, African users have been sending money more and more – the total remittance user base (users transacting in multiple currencies) on Paxful has grown by nearly 140% in Kenya and over 115% in Ghana. In 2021, Ghana experienced a Trade volumes are growing by 95% every year.”