• About Hisa Technologies
  • Advertise
  • Careers
  • Contact Us
  • Estate Cloud
Tuesday, May 17, 2022
  • Login
  • Register
No Result
View All Result
NEWSLETTER
Kenyan Wallstreet
  • Home
  • News
    • Kenyan News
    • African News
    • Global News
  • Business
    • Agriculture
    • Banking
    • Aviation
    • Energy
    • Manufacturing
    • Markets
    • Personal Finance
    • Technology
    • Startups
  • Lifestyle
  • Podcast
  • Videos
  • Events
  • Blockchain & Digital Currencies
  • Calendar
  • Home
  • News
    • Kenyan News
    • African News
    • Global News
  • Business
    • Agriculture
    • Banking
    • Aviation
    • Energy
    • Manufacturing
    • Markets
    • Personal Finance
    • Technology
    • Startups
  • Lifestyle
  • Podcast
  • Videos
  • Events
  • Blockchain & Digital Currencies
  • Calendar
No Result
View All Result
Kenyan Wallstreet
No Result
View All Result

Will Kenya take the lead in crypto regulation, or throttle opportunities for financial inclusion while its neighbours thrive?

Scott OnderbyScott Onder
May 10, 2022
in Blockchain & Digital Currencies, Editorial
Reading Time: 5 mins read
In 2021, Mercy Corps Ventures and Celo partnered to test the application of cross-border stablecoin payments for 200 young people living in informal settlements in Nairobi, Kenya, for completing digital microwork during COVID-19 lockdowns.

In Kenya, 68 per cent of the total population is under the age of 35. This group is entering the workforce at unprecedented speed and scale, but the formal economy is not meeting job demand. Today’s global crises are further exacerbating unemployment. A promising solution can be found in digital microwork – a form of digital labour outsourced by global firms that breaks up complex technical projects into thousands of fractional tasks which can be completed at any time on a smartphone. This provides new and flexible income streams for the burgeoning youth population while supporting Kenya’s Vision 2030 objective to become a global business process outsourcing (BPO) destination in the next eight years. 

As a form of BPO, digital microwork has the potential to unlock income opportunities across different skill levels and increase savings potential for un/underemployed youth in radical ways. But if microwork jobs are low-hanging fruit, what hinders young Kenyans from taking advantage of them? This is largely due to the cost and friction of cross-border micropayments. Transaction fees often require microworkers to forfeit a significant portion of their earnings (in some cases up to 30 per cent of gross earnings), making microwork uneconomical. Cryptocurrency removes this costly barrier, and stablecoins – a type of cryptocurrency tied to a store of physical value like a fiat currency – make cross-border payments affordable, simple, instantaneous, and accessible to all. 

Crypto-for-good organisations are proving the potential of cryptocurrency and digital labour through real-world use cases. In 2021, Mercy Corps Ventures and Celo partnered to test the application of cross-border stablecoin payments for 200 young people living in informal settlements in Nairobi, Kenya, for completing digital microwork during COVID-19 lockdowns. The three-month pilot demonstrated that cryptocurrency (in the form of Celo Dollars – cUSD) dramatically reduced the average transaction cost for microwork payments – dropping from 28.8% for a $5 transaction, to 2.02%, regardless of the transaction value. This translates to a 93% reduction in transaction fees (from $1.44 to $0.10), drastically boosting participants’ daily take-home earnings. Furthermore, it unlocked the digital microwork sector as a desirable earning opportunity for youth, and seamlessly improved participants’ ability, and desire, to save. 

ADVERTISEMENT

Now, it is up to Kenyan policymakers to ensure a delicate and enabling regulatory balance is in place to scale these opportunities. Stablecoins can solve real market problems and unlock value in the digital economy for Kenyans. Today, nearly one in 12 Kenyans own cryptocurrency, Kenya is already the world leader in peer-to-peer cryptocurrency transactions and is ranked fifth overall in cryptocurrency adoption. 

The country is well-positioned to build on its reputation and leapfrog many of its peers through digital labour and cryptocurrency. Careful monitoring of this rapidly growing system is important, but the lack of a clear regulatory framework risks throttling opportunities for Kenyans while its neighbours thrive. Such a framework can promote consumer protection while supporting innovation. Moreover, overregulation may lead to an underground digital ecosystem where opportunities to create a free and equitable system becomes entirely out of reach for everyday users.

To enable a successful new digital economy, the Kenyan government can proactively take the following actions:

Recognise the legitimacy of stablecoin. In 2015 the Central Bank of Kenya’s (CBK) renounced Bitcoin and similar technologies but more recent developments include discussions of a Kenyan digital currency. This is an important first step to fostering the enabling environment necessary to scale the transformation of the digital economy.

Address the largest potential barrier to inclusion – a Know Your Customer (KYC) requirement that makes it difficult, if not impossible, to get started. Simply setting traditional KYC requirements similar to a bank account may not work. Having a more inclusive and innovative approach to KYC and Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) compliance is at the root of the success for mobile money platforms, such as M-Pesa, and should be considered for cryptocurrencies.

Form a Working Committee that designs a regulatory roadmap
and use a “test and learn” environment, such as a regulatory sandbox, to closely evaluate and publicly trial new systems and processes. 

Trial digital labour and stablecoin on a larger scale as part of Kenya’s “test and learn” environment, building appropriate consumer protection safeguards into new products and services while learning from, and working with, innovators.

Apply lessons learned from the Working Committee and initiatives tested to develop a stablecoin regulatory framework, with clarity on the near-term and long-term implications and opportunities of stablecoins and the digital economy more broadly.

Work with other governments to establish cryptocurrency regulations and promote the urgency of doing so
. Cryptocurrency is a global currency, so related regulations will require global cooperation. Kenya’s policy development will require Pan-African and international collaboration to be truly effective.

The most significant decision for policymakers and leaders is whether to risk reinforcing existing systems that exclude millions from the emerging digital ecosystem, or to actively create a safe, ethical pathway for universal inclusion. The latter can unleash great economic potential  and elevate the lives of many young talented Kenyans.

Scott Onder is the Senior Managing Director, Mercy Corps Ventures 


Hisa App Hisa App Hisa App
Previous Post

Uber Seeks Out of Court Deal with Kenyan Drivers

Next Post

VC Firm Rali Cap Launches $30 Million Fund for Emerging Markets

Related Posts

Bitcoin Under Discussion as 44 Countries Meet in El Salvador

May 16, 2022
Solving the Middle Income Housing Challenge in Nairobi

Solving the Middle Income Housing Challenge in Nairobi

May 12, 2022

High-level Panel Discussion Highlights Role of Local Communities in Driving Crypto Use for Commerce

May 16, 2022

Video; Interview With Hetal Patel – Head of Venture Growth for Mercy Corps Ventures

May 10, 2022

Celo Camp Batch 5 Teams Announced

May 10, 2022

Bitcoin Hits a 10-month Low of Below $30,000

May 10, 2022

Swiss Blockchain NEAR Foundation launches regional hub in Kenya

May 10, 2022

Call for Entries – Sankore announces 2nd Edition of Nairobi Web3 pitch competition

May 9, 2022
Load More
Next Post
VC Firm Rali Cap Launches $30 Million Fund for Emerging Markets

VC Firm Rali Cap Launches $30 Million Fund for Emerging Markets

ADVERTISEMENT

Follow Us

  • 136.2k Followers
  • 2.4k Subscribers
  • 1.1k Followers

WhatsApp

Subscribe

Telegram  

Subscribe

Podcasts

Upcoming Events

May
20
Fri
all-day Equity Group Book Closure
Equity Group Book Closure
May 20 all-day
 
all-day Stanbic Holdings Book Closure
Stanbic Holdings Book Closure
May 20 all-day
 
May
24
Tue
all-day BAT Kenya Payment of Final Dividend
BAT Kenya Payment of Final Dividend
May 24 all-day
payment of final dividend of kes 50.00
May
25
Wed
6:09 am Standard Chartered Dividend Payment
Standard Chartered Dividend Payment
May 25 @ 6:09 am – 8:30 pm
payment of final dividend of kes 14
May
26
Thu
all-day ABSA Bank Kenya Dividend Payment
ABSA Bank Kenya Dividend Payment
May 26 all-day
 
all-day I&M Group Final Dividend Payment
I&M Group Final Dividend Payment
May 26 all-day
 
View Calendar
Add
  • Add to Timely Calendar
  • Add to Google
  • Add to Outlook
  • Add to Apple Calendar
  • Add to other calendar
  • Export to XML

Featured

No Content Available

About Us

We are a leading integrated digital content platform providing in-depth business and financial news across Sub-Saharan Africa & the globe. Kenyanwallstreet.com is a property of Hisa Technologies Ltd, a financial media & software company.

Contact Us

Kenyan Wall Street
Email: [email protected]
Website: www.kenyanwallstreet.com

Disclaimer

The information contained in this website is for general information purposes only.
Read more..

  • About Hisa Technologies
  • Advertise
  • Careers
  • Contact Us
  • Estate Cloud

Copyright 2021. Hisa Technologies. All Rights Reserved.

No Result
View All Result
  • Home
  • News
    • Kenyan News
    • African News
    • Global News
  • Business
    • Agriculture
    • Aviation
    • Banking
    • Energy
    • Infrastructure
    • Insurance
    • Investment
    • Manufacturing
    • Markets
    • Public Policy
    • Real Estate
    • Startups
    • Technology
  • Podcast
  • Videos
  • Events

Copyright 2021. Hisa Technologies. All Rights Reserved.

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In