Kenyan companies are increasingly turning to cryptocurrencies like Bitcoin to pay foreign suppliers.
This shift is due to a shortage of US dollars and the weakening Kenyan shilling.
A survey by the International Monetary Fund (IMF) found that many businesses in Kenya now use digital currencies for international payments.
They often choose stablecoins such as USDT, which is tied to the US dollar, to settle contracts with suppliers abroad.
This method helps them avoid issues caused by the lack of dollars in the country.
The IMF report also noted that some companies use these digital assets to protect themselves against the declining value of the shilling.
By holding stablecoins, they can maintain the value of their money despite the shilling’s depreciation.
However, the IMF has raised concerns about the lack of clear regulations for cryptocurrencies in Kenya.
The current laws are outdated and do not effectively cover digital assets.
This gap has led to an increase in scams and other illegal activities related to cryptocurrencies.
To address these issues, the IMF recommends that Kenya update its regulations to align with international standards.
This would help protect consumers and ensure financial stability as the use of digital currencies continues to grow in the country.
While cryptocurrencies offer a solution for Kenyan businesses facing currency challenges, there is a pressing need for clear and effective regulations to manage the associated risks.
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