Kenya’s Financial Instability Spurs Crypto Interest, PM Kishida Vows Taxation

NFT Studio 24
4 Min Read

Kenya, one of Africa’s leading economies, is witnessing a growing movement towards the exchange of crypto assets and US stock trading among its middle and wealthy classes. During his visit to Kenya, Japanese Prime Minister Kishida discussed with the Kenyan government the development of a new tax system for cryptocurrency trading and the regulation of crypto-asset transactions.

While Egypt has banned the issuance, trading, and promotion of crypto assets, Kenya has maintained a neutral stance. With increasing interest in cryptocurrency and US stock trading, the Kenyan government aims to create new financial resources by developing a tax bill and discussing a “Crypto Bill,” which aims to position crypto assets as a digital currency in Kenya’s financial system.

If the “Crypto Bill” is enacted, holding crypto assets for less than a year will be subject to income tax, after which capital gains tax will apply. Currently, Kenya’s income tax ranges from 10% to 30%. 

Eric Jackson, the CEO of Nairobi-based blockchain-powered stock trading app Hisa, believes that creating laws and regulations for cryptocurrency trading should be done as soon as possible.

Kenya is the top country in Google searches forbitcoin,” and about 12.4% of internet users aged 16 to 64 (approximately 6.6 million people) own crypto assets. 

Although the average annual purchase per capita is relatively low, Kenya has a young population, with many generation Z individuals using crypto assets such as stablecoins and bitcoin.

According to Singapore’s TripleA, Kenya is among the top 10 countries in the world for the number of Google searches for “bitcoin” and has a high volume of peer-to-peer (P2P) trading of crypto assets. Nairobi’s cryptocurrency and Web3 communities continue to spread mainly among young generation Z individuals, with venture capital firms specializing in blockchain startups in Africa being active in Kenya, Nigeria, and South Africa.

Middle-Class US Stock Trading on the Rise

Hisa, a Nairobi-based app that enables users to invest small amounts in US stocks and ETFs, has seen an increase in the number of users investing in American stocks since April. According to Eric Jackson, Hisa’s CEO, middle-class Kenyans are investing in US stocks and ETFs to hedge against a strong dollar and a weak shilling. Hisa plans to grow its app to 100,000 users by the end of the year.

Kenya’s inflation rate (CPI) was above 9% from January to March but fell to 7.9% in April. The Kenyan shilling is now worth about 137 shillings to the dollar, compared to 99 shillings five years ago. Although inflation is settling, Jackson expects the shilling to remain in the 130-140 shilling range through the end of the year.

Kenya’s economy is supported by coffee, tea, and electronic money. Agriculture accounts for about 30% of the country’s economy, while industry and services contribute to the remaining 70%. In terms of GDP, Kenya is the third largest in Africa, with approximately $118 billion (approximately ¥16 trillion) compared to Japan’s GDP of approximately $4.9 trillion (approximately ¥660 trillion).

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