The International Monetary Fund (IMF) has revealed that many Kenyan firms are now using cryptocurrencies to pay foreign suppliers during dollar shortages or periods of shilling depreciation.
An IMF-commissioned market survey revealed widespread use of digital assets in Kenya, particularly within the private sector, suggesting that their adoption as a payment option is more extensive than previously anticipated.
The survey was carried out by a technical working group consisting of officials from the Capital Markets Authority (CMA) and the Central Bank of Kenya (CBK).
“Domestic companies are said to be making regular use of stablecoins such as USDT as a means of payment to settle contracts with foreign suppliers, in particular in times of domestic USD of domestic USD shortages,” the IMF revealed in a report following a visit to Kenya by its technical team on the request of the CMA.
- USDT ($USDT) is the most used stablecoin currently used by about 49 percent of Kenyans that own cryptos, followed by
- USDC ($USDC) (31 percent) and
- BUSD (9 percent) – [Now delisted and phased out]
The IMF survey revealed that companies are increasingly using stablecoins as a hedge against the depreciating shilling (KES), further promoting the adoption of unconventional assets in Kenya’s economy.
“In addition, private sector actors mentioned that they have seen the use of stablecoins as a store of value and hedge against the depreciation of the Shilling [KES] as a rather common driver for crypto asset adoption among Kenyan citizens,” the lender said.
According to the survey, the average cryptocurrency user in Kenya is under 40 years old and primarily invests in:
- Bitcoin
- Ethereum, and
- USDT
Most individual users invest less than KES 100,000 and, like corporations, use digital assets to hedge against the Kenyan Shilling’s depreciation and facilitate international settlements.
Estimates suggest that Kenya has over 730,000 cryptocurrency users, though the IMF believes the actual number could be higher.
“Private actors have indicated that the circumvention of the CBK’s soft ban on the provision of fiat payment rails for crypto asset sector actors could be rather widespread,” noted the IMF.
Consequently, the IMF has asked Kenya to establish a regulatory framework to govern the use of cryptocurrencies.
🇰🇪REPORT | IMF Advises the Capital Markets Authority of Kenya to Create Predictable Regulatory Framework for the Crypto market
Here is a quick synopsis of the 6 recommendations provided by the IMF to Kenya.https://t.co/8ESNQLWbzC @IMFAfrica @CMAKenya pic.twitter.com/oW4LeAayqz
— BitKE (@BitcoinKE) January 10, 2025
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