Trading in cryptocurrencies has found a new haven in Nyeri, thriving right under the nose of authorities despite a stark warning by the banking sector regulator.
While the law prohibits the use of any other currency other than the legal tender, Kenyans can now pay for food in Nyeri town using bitcoins.
Betty Place Restaurant has introduced bitcoins as a mode of payment, a first in the region. The minimum one can pay is worth Sh100.
Central Bank of Kenya (CBK) Governor Patrick Njoroge warned that using bitcoins could result in massive money loses for those who choose to invest in the currency.
“From our perspective that (bitcoin) is something we cannot support. It is a bubble of a kind. It is dangerous. Be ready to lose all your money,” Dr Njoroge said in a past press briefing. On Thursday, Head of Communication at the CBK Wallace Kantai said the position was not about to change. "Refer to our position as given by the governor in January. That stand has not changed," he said.
But Beatrice Wanjiru Wambugu, the owner of the restaurant and a cryptocurrency enthusiast, was unperturbed.
She said that three people had so far paid for her services using the currency.
They paid an equivalent of Sh4,000. “We convert the equivalent of local currency with the bitcoin value. “Bitcoins can be broken down up to, for instance, 0.00000001 of a currency. You can pay a bill of anything from Sh100 upwards. Our system will produce an address or a barcode, you scan and transfer bitcoins to our wallet,” Ms Wanjiru said.
For one to pay for food using virtual currency, one needs to be part of the cryptocurrency community and have bitcoins.
One also needs a blockchain wallet — a mobile phone application that lets you store, send, and receive digital assets.
There are dozens of options to choose from, for example blockchain, mycelium and coinomi. Apart from the Nyeri restaurant, a lounge at Kenyatta University and an ATM in Nairobi are said to trade in bitcoins. On Tuesday, Parliament gave the Treasury two weeks to decide whether cryptocurrencies should become legal tender in Kenya.
“There is a bigger problem in Kenya since people are trading billions in virtual space yet the Treasury has not licensed and taxed it like trade in M-Pesa and bank transactions,” said Joseph Limo, chair of the National Assembly’s Finance and National Planning Committee. In the meantime, the Treasury seems to be weighing whether the government should support the innovation or kill it all together.
The CBK, on its part, said it was consulting global partners on cryptocurrencies and how they work, but it insisted that Kenyans should not engage in the trade. The biggest hurdle however for cryptocurrencies in the country and globally is their volatility and lack of legal framework for them.
For instance, the value of bitcoins has suffered a grave decline this year falling from a peak of $19,300 (Sh1,942,352) in February 2017 to $8,500 (Sh855,440) in February 2018.