Central bank mulls blockchain, cryptocurrency adoption

Monday November 5 2018

Bitcoin

According to the coin market capitalisation, there are over 2,090 cryptocurrencies, with a total market cap of $210 billion 

By MOSES K. GAHIGI
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As blockchain — a revolutionary technology that supports a growing stable of digital currencies — continues to capture people’s imagination and disrupt industries, the central bank is keenly following the technology and crypto currencies to map areas of adoption.

“We are informing people about blockchain, some players are looking at adopting the technology, the only grey area is with cryptocurrencies. We are informing the public about the risks associated with trading in them,” said Monique Nsanzabaganwa, the deputy Governor of the central bank.

She said that although they are yet to come up with a position on cryptocurrencies, they are continuing to observe them and their use.

I & M Bank together with Norwegian company Blockbonds recently launched SPENN, a blockchain based payment product, but cryptocurrencies are a new trend in the market.

During the recently concluded Transform Africa Summit, Ms Nsanzabaganwa said there is no restriction in trading in cryptocurrencies in Rwanda.

“You can issue them even tomorrow, but let us first disseminate knowledge and information to the public so that they know what they are doing,” she said.

Blockchain is an immutable ledger that is decentralised in nature and keeps a growing data of linked records in blocks, the data recorded in a block cannot be altered by anyone and it is secured by a system called cryptography.

According to the coin market capitalisation, there are over 2,090 cryptocurrencies, with a total market cap of $210 billion, and each currency has an underlying blockchain on which it is built.

The pioneer cryptocurrency bitcoin which was created in 2009 still leads the pack with over $113 billion in market cap, going for $6,527 per coin, but although all currencies are supported by a blockchain, they are different in technology and their blockchains have distinct uses.

With issues of biting inflation, high interest rates, political instabilities and general liquidity challenges plaguing some African economies, analysts are predicting that the continent will increasingly get attracted to cryptocurrencies, especially after they get enough information about how they work and the space they occupy.