Experts eye blockchain inclusion in financial sector services

Kenyan regulators and cryptocurrency experts have started discussions on potential inclusion of blockchain technologies and the currency in the financial services sector.

This comes at a time when cryptocurrency and financial technology (fintech) is opening up new possibilities including creation of alternative investment asset classes, financial products, faster payment and settlement options and stronger security for financial transactions.

Chartered Financial Analysts (CFA) Society of East Africa president Patricia Kiwanuka on Thursday welcomed the government’s decision to create a taskforce to come up with a blockchain roadmap for the use of the technology locally.

“Cryptocurrency is here to stay, blockchain is something we are definitely embracing – it’s an investment asset, and if it is an asset, it has risks and it has returns. If you want the risks, please be willing to accept the returns associated with it,” said Ms Kiwanuka on the side-lines of cryptocurrency and blockchain conference in Nairobi.

A recent report by Citibank analysts warned that Kenyans have accumulated holdings of bitcoins estimated at more than Sh163 billion, which could cause widespread disruption to the economy were the cryptocurrency to collapse.

READ: Taskforce to look into hurdles, benefits of blockchain

Capital Markets Authority (CMA) chief executive Paul Muthaura said they have been working with various stakeholders to develop an appropriate sandbox strategy that will create a safe space for new products.

“Fintechs can use the space to re-assess their potential solutions before they are released to the wider market and also to make sure that we build an appropriate understanding of nature of risks and concerns to ensure regulatory models are responsive to challenges that the products will be introducing,” said Mr Muthaura.