Kenya has emerged among countries to watch globally after a report by Chainalysis ranked it top in peer-to-peer (P2P) cryptocurrency trading.
The report published on August 18, indicated that Kenya was the leading country in the trade with many businesses locally now accepting cryptocurrency, mostly Bitcoin, as a form of payment. The study took into account the number of cryptocurrency deposits as well as its users. For a while, the United States and other global leaders have been at the forefront of the trade, fuelled by dollar-billionaires like Elon Musk.
graphic representing Bitcoin
Speaking to the press, BitcoinKE co-founder David Gitonga observed that peer-to-peer trade has grown locally due to the lack of well-defined regulations of the sector.
He noted that his site records an average of 70,000 users per day.
"In Kenya, peer to peer is actually the easiest way for people to get into cryptocurrencies.
Right now there are no centralized exchanges so most people opt to go the peer-to-peer way.
“These exchanges are not controlled locally. For example, they cannot be shut down. It is much easier for people to just transact between each other,” stated Gitonga.
Other countries that rank highly on the peer-to-peer front include Nigeria, Vietnam, and Venezuela.
"Several countries in emerging markets, including Kenya, Nigeria, Vietnam, and Venezuela rank high on our index in large part because they have huge transaction volumes on peer-to-peer (P2P) platforms when adjusted for PPP (Purchasing Power Parity) per capita and internet-using population.
“Our interviews with experts in these countries revealed that many residents use P2P cryptocurrency exchanges as their primary on-ramp into cryptocurrency, often because they don’t have access to centralized exchanges,” read the report in part.
CBK Governor Patrick Njoroge
Previously, the Central Bank of Kenyan had issued a warning against cryptocurrency noting that it was an unregulated currency that is not issued or guaranteed by any government or central bank.
“This is to inform the public that virtual currencies such as Bitcoin are not legal tender in Kenya and therefore no protection exists in the event that the platform that exchanges or holds the virtual currency fails or goes out of business,” warned Central Bank.
Some of the risks associated with the trade include customers ability to lose money without any legal redress, high volatility in value of virtual currencies thus exposing users to potential losses as well as exposing traders to unfair online targeting or money laundering because they are untraceable.
Kenya also ranked fifth globally in 2021 Global Crypto Adoption Index behind Ukraine, Pakistan, India and Vietnam which was leading in the pack.