UK financial firm BlockBank to open office in Nairobi

A bitcoin retail shop in Hong Kong. PHOTO | AFP 

By JAMES NGUNJIRI

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Summary

• BlockBank uses ledger technology, targeting small and medium enterprises (SMEs), commercial entities and international commercial financial markets.
• The firm will have a bitcoin element in its transactions, making it the first blockchain bank in Africa.
• In a recent research, Citigroup investment bankers said Kenyans have investments in bitcoin to the tune of Sh163 billion, which the new entity is expected to tap.

A United Kingdom-based block chain financial institution, that partly uses bitcoin in transactions, is set to open an office in Nairobi.

BlockBank has already done a feasibility study and is set to roll out operations.

The company — which refers to itself as a bank though not registered in Kenya as such — uses ledger technology, targeting small and medium enterprises (SMEs), commercial entities and international commercial financial markets.

The firm will have a bitcoin element in its transactions, making it the first blockchain bank in Africa. In a recent research, Citigroup investment bankers said Kenyans have investments in bitcoin to the tune of Sh163 billion, which the new entity is expected to tap.

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“Blockchain is the best known type of distributed ledger technology and it, in turn, is famous for being the technology that underpins bitcoin, a virtual currency.

“We saw this as an opportunity for us to start a commercial bank in Kenya with Bitcoin element hence making Kenya have the first blockchain bank in Africa,” said the bank’s chief executive Adam Cuffe in a statement.

READ: Kenyans gamble millions in high risk Bitcoin trading craze

Mr Cuffe said the choice of Kenya was perfect given the technological advancements the country has made over the years.

Recently the government appointed a task force to inquire into the potential of blockchain technology, but the Central Bank of Kenya has warned the public to keep off cryptocurrencies, which use the technology.

Several other countries are, however, exploring the potential of cryptocurrencies and how to regulate them. Mr Cuffe and other officials of the bank were in the country for a week meeting government officials and potential partners to work with in the initiative.