AfriBit Africa Makes Kenya’s Largest Slum A Thriving Bitcoin Economy

Key Takeaways

AfriBit Africa has introduced Bitcoin to around 200 people in Kibera, a slum in Nairobi, Kenya, despite facing some challenges in adoption.

Bitcoin may offer lower transaction costs and excellent growth potential, but locals are using it for speculation instead of daily purchases.

There is a need to increase knowledge about Bitcoin and Web3 adoption in Kenya so that users can experience its positive impact.

In an unprecedented development, AfriBit Africa has facilitated the creation of a thriving Bitcoin economy in Kibera, the largest informal settlement in Kenya, where residents are using BTC for everyday use.

According to a report by AP News, three years of activism by AfriBit Africa have led to the adoption of Web3 among Nairobi’s poorest workers, with approximately 200 people becoming part of a thriving Bitcoin economy in the Soweto West neighborhood of Kenya’s capital, Nairobi. The development is part of AfriBit’s initiative to extend financial services to one of the country’s poorest and most under-banked areas.

Improve Financial Inclusion

The organization revealed that the adoption of cryptocurrency within the slum area aligns with the ideals of cryptocurrency as an accessible and democratic technology despite the risks associated with digital assets. AfriBit Africa is a Kenyan Fintech company that has introduced Bitcoin (BTC) to the slums through its nonprofit initiative to improve financial inclusion. Commenting on the development, AfriBit co-founder Ronnie Mdawida, a former community worker, stated:

“In many cases, people in Kibera do not have an opportunity to secure their lives with normal savings […] with bitcoin; they do not need documentation to have a bank account … that gives them the foundation for financial freedom.”

Garbage Collectors are the Main Bitcoin Agents

AfriBit initiated the current thriving Bitcoin economy in Kibera in early 2022 through a crypto-denominated grant issued to residents who collect garbage to earn a living, primarily funded by nonprofits. The groups are made up of dozens of young people, who Mdawida says are more likely to be open to new tech.

Once they finish collecting trash, AfriBit Africa pays them a few dollars’ worth of Bitcoin on Sundays. According to the organization, they have so far spent around $10,000 in the community, where the garbage collectors have become the main agents of change, spreading the word about BTC in the neighborhood where the majority earn around one dollar a day. Currently, a small number of residents hold Bitcoin, and some merchants and motorcycle taxi operators accept payments in crypto.

Cheap and Fast

A resident, 23-year-old Damiano Magak, a garbage collector and food seller, said he prefers Bitcoin to M-PESA, a popular local mobile transfer service, because M-PESA transaction costs are higher and the network can be slower. A local vegetable seller, Dotea Anyim, said at least 10% of customers at her vegetable stand pay in bitcoin. She said:

“I like it because it is cheap and fast and doesn’t have any transaction costs […] when people pay using Bitcoin, I save that money and use cash to restock vegetables.”

Conclusion

There have been numerous efforts to introduce Bitcoin to developing countries, but such efforts often encounter challenges. Despite adopting Bitcoin as a legal tender, both El Salvador and the Central African Republic have since reversed or slowed down their adoption. However, in Kenya, a thriving Bitcoin economy is emerging in an informal settlement despite legal and regulatory challenges and crypto crackdowns.

Frequently Asked Questions

Is cryptocurrency legal in Kenya?

While cryptocurrency isn’t explicitly banned in Kenya, the Central Bank of Kenya (CBK) has issued warnings and directives regarding its use, particularly about financial institutions and money remittances. Despite these warnings, there’s no law prohibiting Kenyans from using or trading cryptocurrencies.

Is crypto taxed in Kenya?

Crypto companies registered in Kenya are subject to a 30% corporate income tax on their profits. Resident companies are taxed on global income, including revenue from foreign crypto operations.