WhatsApp Bitcoin Trading Is Exploding Due To African Crypto Exchange Issues
Some governments in Africa are starting to take hard measures against cryptocurrencies and companies in the industry. Regulators in Zimbabwe have shut down two crypto exchanges in the country with the intention to stop crypto-trading activities. However, Bitcoin users are now able to exchange their virtual currencies using the worldwide-known messaging application WhatsApp.
At the same time, Kenya has also warned banks and individuals that are involved in crypto trading activities. But this is not enough to stop the market from growing.
A cryptocurrency user and worker, Jack (according to Bitcoin.com this is not his real name), decided to quit his job in Harare. He was working in a cryptocurrency exchange in the Zimbabwean capital, but the situation in the country was getting tough. The country’s financial regulator decided to ban cryptocurrencies back in May, restricting users from purchasing and selling virtual currencies.
Nonetheless, he keeps with his job, helping users to buy and sell virtual currencies through WhatsApp. He works by connecting buyers and sellers of Bitcoin and placing bids and sell orders on different Whatsapp groups. After he finds a matching he connects the users with each other in a private chat. After it, the deal is closed.
Jack, of course, charges 5% commission for the services. This is slightly above the average fees paid while trading virtual currencies in some exchanges. But it allows users to continue trading in a country that has taken hard measures against cryptocurrencies and crypto-related activities.
The Reserve Bank of Zimbabwe (RBZ) has shut down the two most important exchanges in the country, Golix and Styx24. According to the institution, the exchanges were violating Exchange Control regulations and were offering unlicensed banking services.
Now, peer-to-peer trades take place on WhatsApp in different groups. There are several groups that include traders, casual users and other investors. At the same time, they share important information about the market, the crypto situation there and establish confidence in the market.
At the same time, in Zimbabwe, users pay a premium for each BTC they purchase. At the time of writing. Zimbabweans have to pay $13,721 dollars in their country for each BTC. That is more than double the current price of Bitcoin, which is $6,600 dollars.
The same is happening in Kenya, where Bitcoin transfers through WhatsApp are also expanding rapidly. David Gitonga, a cryptocurrency writer in Nairobi explains that despite the fact that the Central Bank of Kenya attacked virtual currencies, users continue to be involved in the market.
About it, he commented:
“The peer-to-peer market in Kenya is pretty huge. Whatsapp is mostly the preferred form of trading due to ease of communication and speed. The community already has a recognized list of traders that offer the services. Anyone looking to buy or sell crypto is likely going to go through these traders. For large transactions, most sellers and buyers meet face-to-face once they’ve been introduced to each other on Whatsapp.”
In Zimbabwe, this Bitcoin rate is associated with the low amount of Bitcoin that is circulating in the economy. This, perhaps, can be taken as an example of what can happen with Bitcoin in the future when the demand for BTC increases.
At the moment, it is possible to make the payments in Zimbabwe with paper notes, coins or bank transfers. It is also a possibility for just a few lucky users to buy Bitcoin abroad and sell them in the country through arbitrage.