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Kenya may be taking a closer look at cryptocurrency regulation after inviting one of the largest Bitcoin miners in the US, Marathon Digital Holdings, to consult with the government.
“Marathon Digital has been ushered to consult with Treasury on cryptocurrency regime and ministry of energy to discuss the energy needs in connection with the cryptocurrency mining,” President William Ruto said last week at the AMCHAM Business Summit in Nairobi.
During the @AmChamKE Business Summit in Nairobi, Kenya’s president @WilliamsRuto met with the MARA team to discuss how our digital asset data centers can spur energy development in the region and foster US-East Africa trade relations. Watch the clip here: pic.twitter.com/ZgguTXdi4T
— MARA (@MarathonDH) May 1, 2024
The East African country's latest move suggests a growing interest in understanding the potential benefits and risks of cryptocurrencies, and how to regulate them effectively.
This news comes after the Central Bank of Kenya (CBK) previously warned against cryptocurrency due to concerns around anonymity and volatility. This invitation could signal a more open stance on cryptocurrencies in Kenya.
Marathon Digital Holdings has seen a rollercoaster year in the stock market. The company's stock price (MARA) has soared over 17% up to opening price on May 6, reaching $20.67, following the news. This comes after a strong week, with a 33% return for shareholders. However, looking at a larger timeframe, the stock is still down compared to its 52-week high of $34.09.
MARA's stock price was also given a boost from confirmation that the company would be joining the be joining the S&P SmallCap 600 index fund on May 8.
This price volatility reflects the broader market trends in Bitcoin itself. Bitcoin mining profitability is heavily influenced by the price of Bitcoin. The recent Bitcoin halving – programmed event in Bitcoin's code that reduces the amount of Bitcoin rewarded to miners by half – is impacting the profitability of mining companies, and has led to increased competition among miners and pressure on profit margins.
Despite these challenges, Marathon remains optimistic about the future of Bitcoin mining. The company is expanding its operations and has a strong track record of innovation, and has established mining operations in multiple countries, including through partnerships in Paraguay and Abu Dhabi.
Blockhead
Overall, Kenya's invitation to Marathon Digital Holdings is a significant development. It suggests a growing interest in cryptocurrency regulation in Africa, and could pave the way for a more open and innovative financial landscape.
