While the Central Bank of Nigeria has placed a ban on bitcoin and other crypto-related activities, another African bank is turning to Bitcoin for answers. Amid rising depreciation rates of the Shilling, Kenya’s Central Bank wants to switch its base currency to Bitcoin.
For several decades, the Kenyan Shilling has been on a downward trend. The fiat currency has lost nearly 50% of its value against the U.S. dollar since 2010. In 2020 alone, the Shilling dropped by almost 10% when compared to the dollar.
Whilst the Kenya government is pointing fingers at the COVID-19 pandemic and the International Monetary Fund for its woes, officials believe that Bitcoin could put an end to the nation’s suffering.
Speaking on the matter, the Central Bank Governor Patrick Njoroge said:
Our decision to shift to Bitcoin is both tactical and logical. Our currency has always been the punching bag for the IMF, which always claims that the Kenya Shilling is overvalued. This has led to too much pressure on the Kenyan Shilling, and this has a negative effect on the economy. We are losing too much simply because someone at IMF woke up on the wrong side of the bed. Bitcoin will put an end to this.
Njoroge believes that the proposed transition will help lower the country’s national debt when prices appreciate.
Whilst several large corporations and institutions have jumped on the Bitcoin bandwagon, Kenya will be the first country to make such an audacious move. They could be setting an example for other countries to follow.