Kenya has the highest percentage of cryptocurrencies in Africa UNCTAD data show – Bitcoin news from emerging markets
The latest data from the United Nations Conference on Trade and Development (UNCTAD) suggests that Kenya has the highest proportion of cryptocurrencies than any other African country. To counteract the growing use of cryptocurrencies, UNCTAD said it recommends introducing taxes that discourage cryptocurrency trading.
“A way to protect household savings”
According to the data in the latest (UNCTAD) policy brief, Kenya’s digital currency ownership as a share of the population of 8.5% is the highest in Africa and the fifth highest globally. Only Ukraine with 12.7%, Russia (11.9%), Venezuela (10.3%) and Singapore (9.4%) have a higher proportion of cryptocurrencies than Kenya.
As the data show, South Africa is the second ranked country in Africa and eighth globally, with 7.1% of the population owning or holding cryptocurrencies in 2021. In Nigeria, which is one of the largest cryptocurrency markets globally, around 6.3% of the population owns or holds cryptocurrencies. Using the UNCTAD data, this means from the country’s population of 211 million inhabitants, more than 13 million were owners of digital currencies in 2021.
Of the 20 countries surveyed, Australia was found to have the smallest percentage of the population (3.4%) that owned cryptocurrencies in that period.
Meanwhile, in a report on its findings, UNCTAD acknowledged that cryptocurrencies have grown in popularity because they are “an attractive channel to send money transfers through.” The UN agency also said it found that middle-income individuals from inflation-hit developing countries own or hold cryptocurrencies because they are seen “as a way to protect household savings.”
Mandatory registration of crypto exchanges
However, based on the findings, UNCTAD said it decided that “the use of cryptocurrencies could lead to a risk of financial instability.” In addition, their use potentially opens up “a new channel for illegal economic flows.”
“Finally, if left unchecked, cryptocurrencies could become a widespread means of payment and even replace domestic currency unofficially. [a process called cryptoization], which could jeopardize the monetary sovereignty of countries. The use of stack coins is the biggest risk in developing countries with unmet demand for reserve currencies “, UNCTAD noted in the policy brief.
To minimize some of these risks, UNCTAD said it recommends “mandatory registration of crypto exchanges and digital wallets.” The agency also recommended imposing “entrance fees for cryptocurrencies” or imposing taxes on cryptocurrency trading. Doing so will make the use of cryptocurrency less attractive, UNCTAD said. Other recommendations include restricting cryptocurrency ads and issuing a central bank’s digital currency (CBDC).
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