As the globe has been rocked by the Crypto phenomenon in the past few years, the African continent is not excluded from this recent trend. A special hub of attraction on this subject is Africa’s Silicon Valley Kenya. Although the disparity between the wealthy and the poor keeps widening by the day, Kenya is still seen as one of the fast-growing economies in Africa. In recent times, the Central Bank of Kenya took a stand against transacting in Cryptocurrencies, citing its high volatility as a good reason to desist from the virtual currency. Nevertheless, many investors still accept Crypto payments.
For the purpose of clarity, Cryptocurrencies are not the normal fiat currency that we all know, rather they are virtual money that is acceptable as legal tender for the payment of goods and services. They are usually stored in an online wallet and payments can be made anonymously between users. It is important to note that Blockchain is the technology through which crypto is operated and its operation is independent of any government regulations. The most widely used Crypto is Bitcoin which happens to be the first-ever Blockchain-backed virtual currency.
Reports from the Blockchain Association of Kenya (BAK) said that the estimate of Bitcoin transactions in the country was recorded above $1.5m and the number of people using Crypto came to only 4,000. But it is still not clear whether the technology will be able to stand the test of time. The major reason the spread of the virtual currency seems to be slow is because of the decision taken by Apex bank in Kenya which forbids the commercial banks from dealing in Cryptocurrencies. People who are known to invest in Crypto are not allowed to open accounts in the banks which makes it impossible for them to convert their Bitcoin payments into mobile money or even cash. This particular problem has become a headache for BAK which is not relenting in educating the Kenyans on the benefits of investing in Cryptocurrencies. Here are 7 of these benefits.
1. Reduction in Cost of Transaction
Venture-backed Bitcoin companies like BitPesa, Igot (an Australian Bitcoin exchange), TagPesa, M-Pesa, Orange and Airtel are fast expanding in Kenya. These companies pose a challenge to the traditional money transfer agencies like Paypal, Moneygram as well as Western Union. According to BAK, the use of crypto can reduce transaction cost to the barest minimum. It is no longer necessary to pay the exorbitant charges of the normal money transmitters because remittance on virtual currency both national and international is relatively cheap. ODI (Overseas Development Institute) suggested that Africans pay an average of 12.3% in order to send home the sum of $200. On the other hand, companies like BitPesa can accomplish the same with just 3%. It is even better with the likes of Igot which charge a 1% flat rate as a transfer fee.
2. Additional Capital and Profit
Perhaps the best thing about using cryptocurrency for your business start-up as well as embracing the potentials, in the long run, is the fact that it creates a whole lot of new opportunities for business owners. It is already an established fact that you can generate a good income from trading in Bitcoin. The mission of Paxful (a peer to peer Bitcoin marketplace) is providing an accommodating platform where people can build their personal business. This platform makes it very easy for people to make and receive payments using Bitcoin as it has become one of the most convenient as well as the fastest means of money transfer.
The Paxful platform is user-friendly and easily accessible anywhere you find yourself on the globe. It is also a very easy and straightforward way to transact in Bitcoin with well above 300 payment methods. Investors can take their trades a bit further, transforming it into a business that can generate a healthy income. Paxful allows Bitcoin users to digitally interact while making sure that transactions are completed.
3. Bridging Global Boundaries
Investing in Bitcoin can aid business owners in globalizing their business. Entrepreneurs can easily push their business frontiers both nationally and internationally extending their goods and services to sister countries. To further explain, entrepreneurs can establish their online stores and make Bitcoin a payment option. In this way, the business will be open to a whole new set of potential customers globally. These customers can make instant payments from their Bitcoin wallets.
4. Safer Online Trading
Kenyan-based investors are exposed to a virtual environment demanding a very high standard of protection. But trading in Bitcoin gives you the necessary assurance you need to be confident in your business transactions. As we all know, entrepreneurship comes with an inherent degree of risk. These risks can be mitigated by leveraging on the benefits that the virtual currency has to offer. Compared to the traditional mode of transaction which is the banking system, the virtual currency platforms afford you a comfortable level of security.
Every business owner is free to take advantage of all the security measures associated with owning a Bitcoin wallet. Such security measures come in the form of 2-Factor Authentication which Bitcoin wallet users are encouraged to activate on their account. When the “2FA is activated on a Bitcoin account, it becomes absolutely impossible for another person to have access to your account. Thus the incidence of fraud is eliminated and your account is completely protected.
5. Financial Inclusion for the ‘Unbanked’
It is a known fact that the documentation required to open an account with the regular financial institutions makes their account opening process a tedious one, but with cryptocurrency, not much is required. The only necessary instrument you need is a modern device through which you can access the internet. Consequently, the unbanked, as well as those who cannot find their account opening documentation, can go ahead and enjoy the all-encompassing financial inclusion that Cryptocurrency has to offer.
The Crypto also offers absolute security as well as unparalleled accessibility which make it ideal for the unbanked population of in Kenya, offering them the much-needed opportunity to grow their investment. In addition, they can save a lot of time in transactions and also create a digital financial footprint and a credit history. This can come in handy for loan receipts and can also be leveraged on in new business opportunities.
6. Alternative to Financial Institution
Another good reason why Kenyans should embrace Cryptocurrency is the death of necessary banking infrastructure in the country. Transfer charges are known to be more expensive in areas where financial institutions are few in number. With a Bitcoin wallet, the financially excluded as well as the unbanked can become part of the global financial system.
7. Alternative to High Inflation rates of Local Economies
The crypto is a decentralized currency which means that it cannot be subjected to erratic government policies and regulations. A citizen’s crypto investment cannot be influenced by any government and so it is kept safe from inflation rates in the county.
