A weak Kenyan Shilling alongside a fragile economy has seen a rise in demand for USD-pegged stable coins and in turn driving the uptake of blockchain technology in the country.
This is aimed at protecting valuables from a free-falling shilling that risks devaluing some of these assets.
The Kenyan currency has been on a downward trend trading at Sh140.4 against the dollar on Monday morning.
The "State of Web3.0 in Africa" report by EMURGO Africa and PwC shows that generally there has been an increase in the uptake of stable coins across the region.
The Middle East and North Africa (MENA) region has been identified as the fastest-growing crypto market from 2021 to 2022.
In East Africa, the report showcases Kenya's speedy growth in implementing blockchain solutions that stimulate economic development in the region.
EMURGO Africa Chief Executive Ahmed Amer, says that the recent developments have seen blockchain funding soar by 1,668 percent in 2022 compared to the preceding year.
“This growth accumulated a total of USD 91 million (Sh12.6 billion) in countries like Kenya, South Africa and Nigeria. This heralds Africa's burgeoning presence within the global blockchain arena,” said Amer.
With 20 percent of Sub-Saharan African countries currently outlawing crypto-assets, and established data protection laws in countries like Kenya, Nigeria, Egypt, and South Africa, the report underscores the importance of a balanced regulatory approach in safeguarding individual privacy and protection.
Kenya has a high cryptocurrency adoption rate, and is placed fifth globally in terms of crypto ownership as a share of the total population in 2021 (8.5percent ; 4.25 million people) according to a report by the United Nations Conference on Trade and Development.
UNCTAD attributes Kenya's growing use of digital currencies to low fees charged by crypto exchanges, the speed with which remittances are sent, and increasing internet access.
