In this series, the year in review, we are having chats with our members & partners, to hear what challenges, lessons and adaptations they’ve taken in the year 2020.
Despite its negative effects on the different economies all around the year 2020, the pandemic has also helped accelerate several digital reforms in companies large and small. Cryptocurrencies and blockchain have been part of that transformation.
In fact, for the first time in a long time, the Bitcoin hit its highest point in 2020, on December 16th, rekindling excitement in retail investors in a way it has not since the cryptocurrency last peaked in 2017. But while Bitcoin might have dropped off the radar for some, publicly traded companies have maintained a keen interest in cryptocurrencies ever since and this involvement in both Bitcoin, other cryptocurrencies and blockchain (the secure authentication technology behind Bitcoin). This could help fuel gains in several companies as we head into 2021.
“Blockchain can help move products from the supplier to the consumer. It allows for more efficiency and eliminates middlemen.” Kamau Nyabwengi, CEO YEN Africa.
From traditional financial powerhouses looking to develop their own cryptocurrencies to fintech firms looking to add Bitcoin functionality to their products, to other companies using blockchain to improve their operations, these companies utilizing these technologies run the gamut.
The Young Entrepreneurs Network Africa (YEN Africa) is a networking platform that connects young innovative entrepreneurs to impact Africa through sports and soon through Blockchain technology.
The company also connects young aspiring and budding entrepreneurs to the knowledge, resources, and social capital they need to succeed.
A member of Nairobi Garage, YEN Africa has moved a step further to host several events around Blockchain and recently announced that they will be launching YENTS in the first quarter of 2021. YENTS is a stable coin that will be used to pay entrance fees for the golfing tournaments.
According to Investopedia, stablecoin is a new class of cryptocurrencies that attempts to offer price stability and are backed by a reserve asset. Stablecoins have gained traction as they attempt to offer the best of both worlds—the instant processing and security or privacy of payments of cryptocurrencies, and the volatility-free stable valuations of fiat currencies.
As we are just a few days away from the end of the year, we had a quick chat with Kamau Nyabwengi, CEO YEN Africa, and one who is quite passionate about the whole blockchain technology.
Kamau shared with us some of the highlights of the Crypto world in 2020, and what his company has been up to especially in Blockchain and Cryptocurrency over the period.
// As hard as the year has been, 2020 saw a new high of the bitcoin, climbing above $20,000 for the first time in history and notching a new all-time high. The world’s most prominent digital currency broke through the $20,000 level on December 16th. The cryptocurrency rose to as much as $20,817.
By rallying to this price point, bitcoin was up roughly 190% since the start of the year and nearly 440% from its 2020 low of less than $3,900 reached in March. “Now that bitcoin has climbed to a fresh record high, it will be interesting to see what price levels it attains going forward,” said Kamau. The last time the cryptocurrency hit that all-time high was in 2017
// 2020 also saw a great adoption of the cryptocurrency in Kenya especially by the Kenya Government after the Kenya Revenue Authority announced that the upcoming Kenya Digital Service Tax (DST) will be applicable on cryptocurrencies.
According to BitcoinKE, KRA announced that any company operating a cryptocurrency platform will be mandated to pay the 1.5% tax which takes effect beginning on January 1, 2020, and submitted via an online form. According to Kamau, this is a sign of growth in the space, keeping in mind that the Government for the longest time had opposed the cryptocurrencies.
// In 2019, Kenya’s financial regulator, the Capital Markets Authority (CMA), announced that the new regulatory sandbox will not accommodate blockchain firms dealing in cryptocurrencies. However, in 2020, Kamau says that some of the Crypto Projects are already being accepted in the CMA Sandbox which marks a great milestone for the companies and startups in the space.
// Globally the Cryptocurrency space has seen growth in its adoption as platforms like Paypal are now accepting Bitcoin as a mode of payment. PayPal made the announcement around them getting into the cryptocurrency market in October, announcing that its customers will be able to buy and sell Bitcoin and other virtual currencies using their PayPal accounts. According to an article by BBC, those virtual coins could then be used to buy things from the 26 million sellers which accept PayPal. Paypal rolled out the buying options in the US and the full rollout to other countries due early next year.
// The number of start-ups in the country in the crypto space also grew in the year 2020. There has been a great advancement in the space as more crypto companies raised funds and also got awards.
// In 2020 there has also been a rise in consumers and investors across the globe being on lookout for an alternative investment that does not have the volatility that people associate with decentralized cryptocurrencies such as Bitcoin. This has seen a rise in demand for the stablecoins, that may well be the answer to this need.
Several interested firms in the private sector are working on their take on stablecoins while several countries are developing their own. The rise of stablecoins will also be the needed push many regulatory bodies will need to come up with sorely needed regulatory guidance for cryptocurrencies.
As a company, Kamau also highlighted that the year had been tough forcing them to push further some of their events and launches. However, he shared a few highlights which include:
// YEN Africa developing a stablecoin known as the YENTS (Young Entrepreneurs Network Token). The launch of the YENTS was set for November however, they have had to push it to the first quarter of the year 2021.
The coin will initially be used within the YEN network to pay for training or participation in the company’s sports events. However, Kamau says that they plan to extend the use of YENTS to allow investment in a planned golf course in Kenya within about 18 months.
“Blockchain can help move products from the supplier to the consumer,” Kamau says. “It allows for more efficiency and eliminates middlemen.”
In conclusion, Kamau notes that’s Investing in crypto coins or tokens is highly speculative, and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.