Governor of the Central Bank of Kenya, Patrick Njoroge, admitted that he was under external pressure from cryptocurrency enthusiasts to convert the nation’s reserves into Bitcoin (BTC).
In a Meet with lawmakers on September 19Njoroge called the plan “crazy”, adding that it would be risky to convert the assets into Bitcoin given the volatile nature of the digital commodity.
Additionally, he hinted that lawmakers may be under pressure to influence the legislative process in favor of adopting cryptocurrencies.
Pressure to Push Crypto
Interestingly, the governor said he was ready to do jail time if the nation adopted bitcoin during his administration. He stated,
“I know you’re under a lot of pressure from some of these people pushing these things. [cryptocurrencies] because for them it is good. I can assure you that I have many people who pushed me to put our reserves in Bitcoin. I would have lost my mind with this kind of madness.
Njoroge added that the nation could only decide to adopt cryptocurrencies if they provide a solution to a specific problem. To move away from the “hype” surrounding digital assets, he called for a review of the bitcoin market.
What problem in our economy are they tackling, he asked? He further stated,
“The answer is no, they are not superior vehicles for, say, payments or other activities. Regardless of the issues, are they better? The answer is no, its security does not outweigh that of your bank account.We perceive it as a kind of something that may be overstated, but we need to examine it properly to determine whether it would solve a certain problem or not.
Need for regulation
Notably, the Central Bank of Kenya has previously warned residents against using cryptocurrencies, citing the associated risks. To control the industry, there are no extensive regulations, however.
In this case, the organization mainly sent circulars to regional banks advising them to exercise caution when interacting with cryptocurrencies or companies that deal in digital assets.
A recent study showing that a record four million Kenyan crypto investors have lost money due to continued selling off in the digital asset market has drawn attention to the seriousness of the threats.
Despite this, Kenya is booming with crypto activities. While Nigeria is Paxful’s largest market in the world, Kenya is currently the second largest market in Africa and the fifth largest market in the world.
Kenya recorded P2P volumes of over $200 million in 2021 and over $125 million in the first half of 2022. Paxful continued, “We expect a 25% increase in trading volume in Kenya for 2022. »
In response to the substantial increase seen in Ghana and Kenya, Paxful said:
“There are more and more African users sending money over the years – the total remittance user base (users trading in multiple currencies) on Paxful has grown by nearly 140% in Kenya and over 115% in Ghana in 2021. In 2021, Ghana experienced 95% annual growth in trade volume.