Among the African nations, Kenya stands out as a key player in the digital economy, especially in the realm of Web3. During 2022, Kenya recorded the highest influx of blockchain funds in Africa, totaling an impressive $895 million. Nigeria followed closely with $563 million, while South Africa secured $456 million.
Furthermore, Kenya’s advantageous position becomes more evident when considering its internet penetration rate of 42%, financial inclusion rate of 88%, and mobile cellular subscription rate of 123%. These factors collectively contribute to attracting the various benefits and utilities offered by the Web3 industry.
According to a report by Emurgo on Kenya’s position in the Web3 space, the country ranks fifth globally in terms of crypto ownership. However, there are currently no specific laws enacted for this industry in Kenya.
In 2022, Dr. Patrick Njoroge, the governor of Kenya’s central bank, mentioned the plan to establish a regulatory framework for the country in the near future.
Additionally, there is a proposal to amend Kenya’s Capital Markets Bill. If passed, Kenyans involved in the crypto industry will be required to report their activities to the Capital Markets Authority (CMA) for taxation purposes.
If approval is granted, it could potentially impact the growth of the Web3 industry in the country. Emurgo has expressed concerns that it may reduce the sector’s competitiveness by raising entry barriers and increasing prices.
The report highlights that the primary driver for crypto adoption in the East African nation is the affordability of transaction fees, particularly for remittances sent by Kenyans.
NFTs and real estate tokenization
Moreover, in terms of the reception of Web3 in Kenya, Emurgo highlighted the appeal of NFTs to local artists. The blockchain technology ensures that these digital assets cannot be reproduced, thus reducing the counterfeit market.
Emurgo also mentioned the collaboration with HoneyCoin, an African financial aggregator, which enabled Kenyans to purchase and own NFTs using their M-Pesa accounts. Additionally, Octopizzo, a Kenyan rapper, partnered with the company to create music NFTs for his songs.
In the real estate industry, Emurgo noted that tokenization on the blockchain is still in the development stage in Kenya. As the market grows, it will allow more citizens to easily own properties in the best areas of the country.