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Red Cross to Help Disaster-Riddled Communities in Kenya via Blockchain

A notable challenge when supporting disaster-stricken communities entails overseeing the entire process and ensuring that everything transgresses as planned.

The Red Cross is eyeing blockchain-backed “local currencies” to help revitalize poor communities and establish a thriving economy on the foundation of smooth trades. As a result, the Red Cross societies of Kenya, Norway, Denmark, will be partnering to steer this initiative.

Kenya’s rejuvenation plans

In Kenya’s slum and poor communities, members have a lot of things to sell, such as home-grown tomatoes. Nevertheless, few of them have sufficient disposable incomes to enable them to buy these goods, and this reduces the urge to produce more.

In some cases, barter trade is involved, for instance, exchanging farm produce for labor rendered. However, keeping track of debts is an inefficient process. This trend is also noted in village savings and loan groups, whereby transactions are mostly recorded on paper slips.

The Red Cross seeks to eradicate this challenge by offering a credit loop supported by blockchain-powered currencies. This will be instrumental in ensuring that these communities do not handle over cash in a straight forward way as they will be made to be self-reliant. As a result, they will be in a position to tackle natural disasters, such as drought, that usually recur in Kenya.

This objective will be attained by using a phone app comprising of simple features needed to transfer credits. All transfers will be stored on a blockchain. Slum-dwellers or villagers will, therefore, be in a position to be renumerated for their labor and consequently spend the credits earned on local services and goods. The system has already been tested in parts of Ethiopia and Kenya, and it has been pivotal in enhancing economies in poor communities.

Adam Bornstein, a member of the Danish Red Cross, stipulated that this system functions similarly as the popular M-Pesa mobile transfer network in Kenya, though the users will not be required to hold Kenyan shillings, the national currency.

The blockchain project seeks to efficiently utilize the aid fund availed by the Red Cross to the tune of $1 billion annually.

Image via Shutterstock

Billionaire Chris Kirubi Warns Followers of Bitcoin Scammers Impersonating the Kenyan Tycoon

Kenya’s billionaire businessman Chris Kirubi has once again tweeted a warning to inform his 1.4 million followers about cryptocurrency websites that have been using his name and photos to solicit investments in a scheme called “Bitcoin Profit.” The tycoon clarifies that he is not associated with such organizations, and the information provided is deceptive and misleading.

Industrialist and businessman Dr. Chris Kirubi is on the list of Africa’s wealthiest people by Forbes Magazine, with his total net worth valued at US$400 million (Ksh40 billion). He is known for sharing wisdom concerning business and investment tips through his credible websites and official verified social media handles. The scammers have been re-quoting well-known sayings and pieces of Kirubi’s typical advice on business and investment to appear authentic to unsuspecting Kenyans.

Renewed Warnings

The tycoon already sounded the alarm over a similar scheme in March.

The automatic trading software called “Bitcoin Profit” has been citing Kirubi as one of their investors to catch the attention of unsuspecting Kenyans.

The rogue website falsifies information, portraying Dr. Kirubi to have spoken these words on the fraudulent money scheme:

“I thought it wasn’t true when my older brother told me but after seeing with my own eyes, I am glad I tried it.”

The Ponzi scheme website goes further to fake detailed information regarding how Kirubi had ventured into this latest investment and was reaping big.

Kirubi, therefore, urges members of the public to exercise extreme caution when making any investments.

This is not the first warning alert. As early as 2015, Kenyans were warned against being duped by crypto fraudsters. During the same year, the Central Bank of Kenya issued a stern warning to the public against digital currencies. In 2018, the central bank blacklisted cryptocurrencies and warned banks against dealing with them, citing security concerns.

During early last year, a lesser-known Brazilian crypto platform called Velox 10 Global defrauded thousands of millions of Kenya shillings belonging to local Bitcoin investors. Last year, the Blockchain Association of Kenya stated that the total number of crypto transactions, particularly Bitcoin, in Kenya was approximated to be worth more than US$1.5 million.

Crypto Scammers Appeal to People’s Greed

Millions of crypto investors have been scammed out of huge amounts of money. In 2018, losses from crypto-related crimes amounted to US$1.7 billion. The fraudsters use new-technology and old-fashioned tactics to swindle their marks in schemes based on virtual currencies exchanged through online databases known as blockchain.

Many crypto scammers rely on the tried-and-true Ponzi schemes, which use the income from new clients to pay out returns to earlier investors. Others use highly sophisticated and automated processes, including automated software, which interact with social media channel systems among people interested in virtual currencies. Even in cases where cryptocurrency plans are legitimate, scammers can still manipulate their prices in the marketplace.

UN Agency Advises Kenya to Embrace Blockchain Technology to Tame Corruption

The United Nations Office of Drugs and Crime (UNODC) has disclosed that the ball is in Kenya’s court to embrace blockchain technology if it is serious about fighting runaway corruption, which has infiltrated the nation’s public and private sectors.

Bridging the corruption gap

According to audit reports, the primary corruption loophole in Kenya entails manipulating procurement systems as well as other transactions. This has been detrimental because the cost of doing business has skyrocketed in the nation.

David Robinson, a UNODC East African region anti-corruption advisor, asserted that any blockchain-based app can be pivotal in easily tracing corruption and economic crimes.

He noted:

“When corruption represents a breach of trust, a technology that strengthens trust becomes an attractive solution in public projects. In the era of the 4th industrial revolution, online trust became a key asset for transactions between strangers and building confidence in government.”

By leveraging blockchain technology, immutable or tamper-proof storage is guaranteed and this makes transactions traceable. Furthermore, a roadmap of spotting illegal activities is created, which is instrumental in propelling the recovery of stolen assets, minimizing bribery, and decreasing unlawful financial flows.

A third of Kenya’s budget goes down the drain

In 2016, Philip Kinisu, the then Ethics and Anti-Corruption Commission chairman, disclosed that Kenya lost a third of its budget to corruption annually because of a huge technological void and lack of equipment.

The UN agency believes that blockchain technology can be a stepping stone towards addressing this problem by making data transparent, traceable, and accountable. Furthermore, it cuts red tape, eliminates the urge for intermediaries, and minimizes the risk of arbitrary discretion.

Robinson acknowledged:

“To combat government corruption, Blockchain solutions focus on automating and tracking high risk transactions such as public contracts, cash transfers and aid funds.”

Kenya is making headways in the blockchain/crypto space. Last month, the Central Bank of Kenya (CBK) disclosed that it was in discussions with other global apex banks about joining the central bank digital currency (CBDC) bandwagon.

Kenya was also among a pack of leading African nations whose weekly Bitcoin trading volumes exceeded $1 million in July. Moreover, in December last year, the Red Cross showed intentions of helping disaster-riddled communities in this nation using blockchain-backed “local currencies” meant to establish a thriving economy on the foundation of smooth trades.

Kenyan Central Bank Seeks Public Opinion concerning CBDC

As a change of tune about crypto assets, the Central Bank of Kenya (CBK), Kenya’s apex bank, seeks to ask for public opinion about the potential introduction of a central bank digital currency (CBDC).

As one of the pioneers of mobile money payment through Safaricom’s M-Pesa in 2007, Kenya is weighing its options concerning setting foot in the CBDC space.

In a statement, the CBK noted:

“The balance of risks and benefits of central bank digital currency will vary from one economy to another.”

The bank acknowledged some of the benefits rendered by a CBDC, including minimizing cross-border payment costs and offering financial inclusion to those limited by technological knowledge or infrastructure.

Once to roll out the plan, CBDC is expected to drive the financial inclusion of at least 1.7 billion people left out of the banking system.

On the other hand, the CBK cautioned about potential risks triggered by CBDCs. That could be included hindering the effectiveness of the monetary policy by opening doors to money laundering and constraining commercial banks.

For a CBDC to work, the bank noted that regional cooperation could shorten the payment cycle by eliminating the multi-layered banking structure.

Similarly, sentiments were recently echoed by the Bank of Japan (BOJ) governor that joining hands with Europe and the United States was crucial in the issuance of a central bank digital currency. Meanwhile, Tanzania is already setting the ball rolling in the East African region because its CBDC rollout is in high gear.

CBDCs are digital assets backed by central banks and pegged to a real-world asset meaning that they represent a claim against the bank just the way banknotes work. Moreover, central banks will have full control of CBDC supply.

Crypto Exchange FTX Expands Business to Africa, Partnering Kenyan Fintech Firm AZA Finance

To expand its global footprint and presence on African soil, top-notch cryptocurrency exchange FTX has partnered with AZA Finance, a Kenyan-based fintech company.

Through the strategic partnership, FTX seeks to enhance the use of Web3 and cryptocurrencies in Africa by offering ideal networking and learning resources.

Moreover, plans are underway to offer African and digital currency trading pairs, which will make it easier to deposit and withdraw cryptocurrencies using African currencies. The non-fungible tokens (NFTs) market is also expected to be boosted by onboarding artists on the continent.

Elizabeth Rossiello, AZA Finance CEO, welcomed the partnership and stated:

“After serving these booming enterprises for years, we know that the next generation of users, creators, and builders for the Web3 economy is undoubtedly African.”

The swift adoption of cutting-edge technologies by Africans coupled with the continent’s rapid-growing population, which is anticipated to double by 2050, also triggered this partnership.

Founded in 2013, AZA Finance, formerly called BitPesa, is a provider of cross-border payment solutions for businesses with a presence in ten African countries.

Based on a valuation of $32 billion, FTX has emerged as one of the leading crypto exchanges globally, and its expansion drive continues to gain steam.

For instance, FTX recently announced plans to open a regional headquarters in Dubai following the approval of its virtual-asset license.

The exchange’s CEO Sam Bankman-Fried acknowledged that FTX Europe, a branch operating in Europe and the Middle East, would offer “complex crypto-derivatives products with centralized counterparty clearing to the institutional market.

FTX Europe was established earlier this month, becoming the second affiliate of the crypto exchange after FTX US, which was launched in May 2019.

The company continues to expand its business worldwide. In February, FTX acquired Japanese digital assets brokerage firm, Liquid Group, to bolster its global presence, Blockchain.News reported.

NEAR Foundation Sets Up a Regional Hub in Kenya, Boosting Blockchain Innovation in Africa

To trigger talent development, education, and blockchain innovation on African soil, NEAR Foundation, has launched a regional hub in Kenya in collaboration with Sankore, an African-focused blockchain community.

As a Swiss non-profit in charge of the NEAR protocol, the NEAR Foundation sees the hub as a stepping stone towards more blockchain growth in Africa.

Marieke Flament, the CEO of NEAR Foundation, noted:

“We are excited by the potential avenues throughout Africa for blockchain solutions, which come from innovation in development, education and talent. This hub represents a unique opportunity to partner with local talent not only for the opportunities that we know exist today but also for the opportunities yet to be created in the future.”

The hub will consist of an incubation program, events, a Sankore Bounty ecosystem, and an academy. It seeks to bring together Africa’s most talented blockchain developers and support from international investors.

Kevin Imani, Sankore’s founder, pointed out:

“We are thrilled to be working with NEAR to educate and nurture talented individuals to become world-class blockchain developers.”

With Kenya being ranked fifth in 2021’s Global Crypto Adoption Index, NEAR saw the nation as ideal for setting up the hub.

Imani added:

“Our dream is to lead the way in blockchain innovations in providing solutions to Africa’s biggest problems. The NEAR Protocol allows tomorrow’s brightest developers to build custom solutions with scalability, security, and transparency and this hub is the next step in turning our shared vision into reality.”

The African continent continues to gain more limelight in the crypto/blockchain space.

For instance, leading crypto exchange Binance is bridging the financial Gap in Francophone Africa by offering blockchain education, Blockchain.News reported.

Kenyan law taxes crypto protects consumers

The Capital Markets Law of Kenya was subject to a potential modification that was suggested on November 21. If this amendment were to become law, private individuals who own cryptocurrencies or participate in the trading of cryptocurrencies would be required to provide the Capital Markets Authority of Kenya with information regarding their activities for the purpose of determining how much tax should be collected from those activities.

To our knowledge, this is the first time that cryptocurrencies have been incorporated in any of Kenya’s financial regulatory system.

According to the Capital Markets (Amendment) Bill, Kenyans would be obligated to declare and pay capital gains taxes to the Kenyan Revenue Authority if they sell or purchase digital currencies. This obligation is detailed in the legislation.

Any cryptocurrency that is held for more than a year will be subject to capital gains tax, while any cryptocurrency that is held for less than a year would be subject to income tax on its value.

In Kenya, there is a graduated tax on income that ranges from 10 percent all the way up to 30 percent.

A centralized electronic record of all transactions involving digital currencies throughout the country would be created as a result of the bill, which would also make it possible for individual crypto dealers to register with the government. Additionally, it would recognize digital currencies as being securities.

Kenya is rated number 19 in the world for the amount of persons that use cryptocurrencies, and it is ranked number 5 for trading amongst peers, according to a survey that was done by Chainalysis and released in September.

At the same time as Kenyan President William Ruto is making a request to broaden the country’s income base, the possibility of making the move that is now being discussed is being studied.

It is estimated that around 4 million individuals in this country make use of various cryptocurrencies.

Due to the fact that approximately 8.5% of the population lives in privately owned homes, Kenya now has the fifth highest rate of property ownership in the world.