Discussion Paper No. 322 of 2024 on The Role of Cryptocurrency in Facilitating Access to Financial Services in Kenya

Abstract

This study sought to examine the role of cryptocurrency in facilitating access to financial services in Kenya. The paper navigated complexities involved in cryptocurrency adoption, fostering a conducive environment for inclusion of financial services for all Kenyans. The methodology used was futures foresight that entailed developing scenarios and evaluating the implications of achieving optimal conditions. The key findings reveal that successful cryptocurrency incorporation in Kenya hinges on several vital factors. Firstly, clear regulatory policies are essential in providing a secure and stable environment for cryptocurrency transactions. Secondly, economic stability measured by exchange rate volatility is necessary for fostering confidence among investors and users. Thirdly, technological advancements, which include robust cyber security measures and blockchain innovation, are pivotal in supporting the required cryptocurrency infrastructure. Finally, social factors such as trust, positive attitude towards cryptocurrency and public awareness are significant in influencing the usage and adoption in financial services. On the policy front of the cryptocurrency landscape, the study recommends that emphasis on regulatory transparency and education will build trust and awareness among users. It suggests the implementation of regulatory policies to protect consumers and stabilize cryptocurrency value against exchange rate volatility. The establishment of a national cybersecurity framework tailored for cryptocurrency transactions is proposed to ensure user confidence and platform security. The initiatives will foster innovation, sustainable growth and broader financial inclusion through informed adoption of cryptocurrencies in Kenya.