The first Bitcoin ATM has been installed in Nairobi, making it the first in East Africa, which makes it possible to purchase Bitcoins and Litecoins instantly. The traders can purchase the cryptocurrencies for as little as $5, and they can pay for them in both dollars and Kenya shillings.
Speaking of the ATM, Bitcoin entrepreneur Wangechi Kariuki said;
“The transaction is simple, taking less than two minutes; You can get as many Bitcoins as the value of your cash.”
Although this is the first digital currency ATM that has been installed in East Africa, South Africa installed it’s first four years ago, and has doubled its number since then. This does not come close to the US though, where there are ATM’s installed in more than 2,000 locations.
Digital currencies are becoming more popular in Kenya, despite the warnings from experts. Traders must first set up an account with a Bitcoin trading platform in order to purchase their chosen cryptocurrency; however, it does come with an inbuilt Bitcoin wallet where the digital currency will be stored. This wallet will contain your Bitcoin address, and a QR code, which is then scanned by the ATM in order to identify the account. The users simply have to scan their QR codes and deposit the cash, before clicking on a buy option, where the tokens will then be reflected in the wallet. Kariuki continued;
“Bitcoins function just like the loyalty points we earn from shopping at supermarkets or the reward points we get from talk time. You can also use them to buy goods or pay for services.”
There are some concerns though and it has been revealed that the ATM does have higher exchange rates. This could be because BitClub earns a commission from every transactions; however, they also have plans to include M-Pesa as a payment option in the hopes that this will increase the number of people who choose to trade in cryptocurrency.
The ATM is currently serving anywhere between 15-20 people a day, which reflects the interest in cryptocurrencies, particularly among younger people. At the end of last year, the results of a survey showed that Kenya had some of the largest Bitcoin holdings. Dr Bitange Ndemo, who is the Chairman of Kenya’s Blockchain and Artificial Intelligence spoke about how far they have come;
“This is a fast growing technology. A few years back we approached mobile money with the same caution we have for cryptocurrency. But look where we are now…We will soon submit our recommendations from the development of the country’s first blockchain-based cryptocurrency.”
There is still a lot of concern surrounding cryptocurrencies though, particularly with the lack of regulation increasing the risk of financial fraud. Patrick Njoroge, the Governor of the Central Bank of Kenya, has voiced the concerns, saying;
“Let us understand the opportunities, the pros and cons that cryptocurrencies bring along before we fully plunge along. We are not anti-innovation, we are not anti-cryptocurrency. We support innovation but are concerned about the impact on financial instability and the inherent risks.”
“As long as you’re transacting online, there will always be the issue of vulnerability. Users need to make sure that they have a second layer security to safeguard against hackers ad do background checks on the people they transact with. Every user has a profile showing the number of transactions he has undertaken and the ratings he has received.”