Better regulatory framework vital in unlocking the potential of blockchain industry, Experts say
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Rading Biko GAROWE ONLINE
- Posted On 10-06-2024, 01:03PM
NAIROBI, Kenya - The blockchain and cryptocurrency industry has emerged as a disruptive force, promising decentralization, transparency, and efficiency across various sectors. However, its growth and mainstream adoption are heavily contingent upon the establishment of better regulatory policies.
Stakeholders in this sector held a two-day forum seeking to address the regulatory framework that continues to hinder the growth of the blockchain and cryptocurrency.
Speaking during the official opening of the Kenya Blockchain and Cryptocurrency Conference 2024, Emmanuel Kata Kimeu, the Secretary, of ICT-Security and Audit Control, highlighted the impactful strategies the government contributes to blockchain technology as it seeks to unlock new opportunities for economic development.
“We are working to establish clear guidelines for initial coin offerings (ICOs), exchanges, and trading practices, regulators can instill confidence in the market, attracting institutional investors and fostering long-term growth. We also aim to establish a conducive regulatory environment that balances innovation with compliance, regulators can nurture the growth of blockchain and cryptocurrency startups, driving technological advancements and economic prosperity,” he said.
Kenya's thriving tech sector, known as the "Silicon Savannah," fosters blockchain innovation and entrepreneurship. Startups and developers are looking into blockchain-based solutions for a variety of industries, including agriculture, healthcare, identity management, and supply chain logistics.
Felix Macharia, the CEO of Kotani Pay,” One of the key drivers behind the rise of cryptocurrencies in Africa is the continent's large unbanked population. Traditional banking services have struggled to reach remote areas, leaving millions without access to basic financial services. Cryptocurrencies offer a decentralized alternative, allowing individuals to participate in the global economy without relying on traditional banking infrastructure.”
Experts and participants attending the two days events at the Centre for Mathematics, Science and Technology Education in Africa (CEMASTEA) in Nairobi pointed out that blockchain technology holds the potential to revolutionize various sectors across the African continent.
Among the sectors that will benefit is agriculture, healthcare, and supply chain management. By providing transparent and immutable record-keeping, blockchain can help combat corruption, streamline processes, and ensure fair distribution of resources.
Kenya just like any other l African country are actively embracing cryptocurrencies and blockchain technology.
Macharia ” For instance, Nigeria has emerged as one of the leading markets for cryptocurrency adoption, with a vibrant community of traders and innovators. In Kenya, blockchain-based platforms are revolutionizing the remittance industry, enabling faster and cheaper cross-border transactions.”
Research shows that most African entrepreneurs are spearheading innovative blockchain projects aimed at addressing local challenges. From decentralized finance (DeFi) platforms to blockchain-powered identity solutions, these initiatives are driving economic empowerment and fostering financial inclusion across the continent.
Despite the promising outlook, the cryptocurrency and blockchain industry in Africa still faces hurdles. Regulatory uncertainty, cybersecurity concerns, and lack of awareness remain significant barriers to widespread adoption. However, with increasing government support and growing investor interest, Africa is poised to become a major player in the global cryptocurrency ecosystem.
Locally, the Nairobi County government is setting up comprehensive strategies to ensure that people have the knowledge and understanding they need to navigate the complex landscape of blockchain, AI, and cryptocurrency effectively.
“Nairobi city being like the hub pretty much the hub of Africa in the technology space, we are having such events as the innovator Nairobi week to get our ideas together, and you know there's a lot of human resources in the technology, technological setup, that is not being harnessed properly and we're not taking advantage of it. This industry in Africa is poised for exponential growth, fueled by a young and tech-savvy population, as well as the pressing need for financial inclusion and innovation. With the right policies and infrastructure in place, Africa has the potential to harness the transformative power of blockchain technology to drive sustainable development and economic prosperity,” said Michael Gumo, the executive committee member for innovation and digital economy in Nairobi City County.
Experts also pointed out that key drivers will propel the adoption and growth of cryptocurrency and blockchain technology across Africa in the next decade.
Financial Inclusion
Africa has a large unbanked population, with millions of individuals lacking access to traditional banking services. Cryptocurrency and blockchain technology offer a viable alternative, enabling people to participate in financial transactions without the need for a traditional bank account. This is particularly impactful in rural areas and among marginalized communities where banking infrastructure is limited. With just a smartphone and internet connection, individuals can securely store, send, and receive digital assets, fostering greater financial inclusion across the continent.
Enhancing Remittances
Remittances play a significant role in many African economies, with millions of people receiving money from relatives living abroad. However, traditional remittance channels are often slow and expensive, with high fees eating into the funds sent by migrants. Cryptocurrency provides a more efficient and cost-effective solution for cross-border payments. Blockchain technology enables instant and low-cost transfers, cutting out intermediaries and reducing transaction fees. This has the potential to increase the amount of money that reaches recipients and stimulate economic growth in receiving countries.
Youth Demographic factor
Africa has one of the youngest populations globally, with a large percentage of people under the age of 25. This youthful demographic is tech-savvy and eager to embrace new technologies. Cryptocurrency and blockchain technology appeal to the younger generation, who see them as tools for empowerment and financial freedom. Online communities and social media platforms have played a crucial role in spreading awareness and fostering grassroots adoption of cryptocurrencies among African youth.
Political and Economic Instability
Many African countries grapple with political instability, economic uncertainty, and hyperinflation. In such environments, traditional fiat currencies can be volatile and unreliable stores of value. Cryptocurrency offers an alternative store of wealth that is resistant to inflation and government interference. As a result, citizens in countries facing economic turmoil are increasingly turning to cryptocurrencies as a means of preserving their wealth and safeguarding against financial instability.
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