The Future of Kenyan Banks: Mitigate Financial Risk Using Cryptocurrencies and Blockchain Technology


  • Olanrewaju Isola FATOKI PhD, KCA University, Nairobi Kenya
  • Jedidah WANJAGI Jomo Kenyatta University of Agriculture and Technology, Nairobi Kenya


The banking sector has undergone tremendous changes in the past decades. This paper seeks to investigate the future of Kenya banks by using cryptocurrency and blockchain technology to mitigate financial risk. A cryptocurrency performs the fundamental function of money, as a medium of exchange. The encryption and decentralization of digital currencies are the most important aspects regarding the applicability of Cryptocurrencies and Blockchain Technology in Kenya. Digital money supports individual investors as opposed to a dominant market player or authority. The fact that no single authority controls cryptocurrencies is the heart of its applicability in Kenya. Digital money is a unifying factor for the world markets defined by growing inequality and financial malpractices. The Kenyan banking system may take advantage of the smart contracts to address the myriad risks owed to the economic actions of the private and public parties. Banks can use the digital money to eliminate intermediaries that often constrain the capacity of the individual traders to enter into contracts. Cryptocurrencies operate on a user-to-user basis to enhance flexibility and control by the individual traders. The use of the technology can help the state to reduce the risk of loss owed to inaccurate authentication and valuation of assets.