Binary Options Trading in Kenya
Kenya may not necessarily ring a bell, but it is actually one of the fast growing emerging market economies in Africa. Kenya has made giant strides in the financial technology space in Africa and beyond, powered heavily by mobile payments giant, M-Pesa. Kenya has the distinction of having a 97% financial inclusion rate, which makes it one of the most advanced countries in Africa in that regard. How have binary options online brokers been able to tap into this market? What are the attitudes and practices of Kenyan binary options online traders?
Kenya does not have a locally-based binary options online broker. Kenyan binary options online traders ply their trade with offshore brokers. Most financial market investment within Kenya is done with the local stock exchange and government instruments such as Treasury Bills. In Kenya, the financial markets are governed by the Capital Markets Act. This law also put the power of financial market regulation and supervision with the Capital Markets Authority (CMA).
In 2016, the Capital Markets Authority decided to respond to the growing trend of forex trading in the country. A study by the Standard Investment Bank of revealed that more than 50,000 Kenyans were participating in forex trading with offshore brokers. The CMA responded by setting a new set of guidelines under a proposed amendment to the Capital Markets Act, seeking to regulate the conduct of forex trading in the country. However, the CMA was silent on binary options online and has remained so till date. The implication of this silence by the CMA is that that binary options online trading in Kenya remains an unregulated industry, leaving locals to trade with offshore companies that offer this product.
Currency Pairs & Spread
The Kenyan Shilling is not a traded currency on the global financial markets. As users of platforms of offshore brokers, Kenyans are exposed to trading several major, minor and exotic currency pairs. Without local binary options online brokers in Kenya, Kenyan traders are forced to trade currency assets that they are not ordinarily familiar with.
However, Kenyans will find it easier to trade commodities such as copper and gold, as these are assets that are found regionally in East Africa and nearby South Africa. It is expected that Kenyan traders would be more familiar with the fundamentals of these commodity assets and be able to trade them on offshore platforms.
Kenyan binary options online traders usually trade binary options online on the platforms of binary options online brokers located in Cyprus and other jurisdictions such as Belize, St. Vincent & Grenadines, Mauritius and Seychelles. These binary options online brokers offer their clients turnkey platforms that have been developed by companies such as SpotOption, Tech Financials, O-Systems, Tradologic and Hello Binary.
Kenyan traders will be given binary options online bonuses by brokers located in areas where they are still valid. However, changes to the regulation regarding the issuance of bonuses by CySEC have been a game changer, as traders will not be given bonuses by Cypriot binary options online brokers.
Deposit and Withdrawal Options
Kenya has an advanced fintech industry which has promoted financial inclusion. Most of this has been powered by M-Pesa, a company which provides mobile payment and digital wallet services to Kenyans, including Kenyan binary options online traders.
With this in mind, how do Kenyan binary options online traders transact on the platforms of offshore brokers?
- Cards: Kenyan traders have access to cards issued by MasterCard and VISA. However, the use of these cards is not universally available to binary options online traders in Kenya. Kenyan traders must therefore check with the binary options online brokers where they maintain accounts to see if this option is available.
- Kenyan binary options online traders can conduct bank wires from domiciliary accounts. This is a method that is available to binary options online traders in Kenya on all binary options online platforms.
- Digital wallets such as Skrill, Neteller and M-Pesa are also available to Kenyan binary options online traders. M-Pesa is the local mobile payment solution which handles more transactions within Kenya than Western Union handles worldwide. It is possible to withdraw funds with Skrill using the account currency (US Dollars, Euros, British Pounds), and receive the payment in Kenyan Shillings.
Legality & Regulations
What are the legal considerations and regulatory conditions attached to the conduct of the brokerage and trading of binary options online in the Kenya?
- Binary options in Kenya are presently not regulated, as they were omitted in the draft proposal to amend the Capital Markets Act.
- Trading of binary options online is not restricted by the financial authorities in Kenya. Therefore, Kenyans an open accounts and trade with offshore binary options online brokers.
- It is presently unclear if there are any financial controls instituted by the Kenyan Central Bank with regards to overseas remittances.
Here are the frequently asked questions that most people have about trading binary options online in Kenya.
- Are binary options online legal in the KENYA?
Answer: The trading of binary options online is presently not prohibited in Kenya, making it legal to do so in Kenya.
- Is it safe to trade binary options online in Kenya?
Answer: The tendency to use bonuses among Kenyan binary options online traders is an issue, as many Kenyan traders open accounts with unregulated entities offering bonuses. The issuance of bonuses as opposed to regulation seems to be the main selection criteria among traders in Kenya. While it is safe to trade binary options online in Kenya, this is only the case when regulated binary options online brokers are used.
- As a Kenyan citizen, am I allowed to trade binary options online with offshore brokers?
Answer: Kenyan traders can trade with offshore binary options online brokers. This is because there are no laws guiding the conduct of binary options online in Kenya, which is not the case with the forex market where the CMA has come out to lay clear-cut rules and regulations.
- How does M-Pesa support deposits and withdrawals in Kenya with regards to binary options online?
Answer: M-Pesa has been integrated into Skrill. Therefore, it is now possible to deposit with, and withdraw Kenyan Shillings from your binary options online broker using M-Pesa, routing this transaction through the Skrill payment system.
- Are Kenyan binary options online traders allowed to use digital wallets?
Answer: Kenyan binary options online traders are allowed to deposit and withdraw funds using Skrill, Neteller, Payza and a host of other digital wallets. A popular local digital wallet is M-Pesa.
- Is it possible for binary options online traders in Kenya to transact on binary options online platforms using PayPal?
Answer: PayPal does not support top binary options online brokers except those in the US, Australia and UK. These are areas where there is no access for Kenyan binary options online traders. Therefore, Kenyan binary options online traders cannot use PayPal in depositing or withdrawing funds on their platforms.
Best Binary Options Brokers in Kenya
With the absence of binary options online brokers in Kenya, Kenyan traders are left with no other choice than to trade with offshore brokers, some of whom are based in Cyprus, Seychelles and Mauritius. The top binary options online brokers in Kenya are as follows:
It is obvious that binary options online trading in Kenya is still at the rudimentary stage. Without any regulations or laws governing binary options online trading in Kenya, local traders are left with no choice than to patronize offshore brokers.
Kenya has a large youthful and tech savvy population. Nearly everyone in Kenya owns a mobile phone. There is a huge potential in terms of expansion of the binary options online market in Kenya. It is left to see if any offshore brokers will take up the opportunity to open shop in Kenya. The presence of a well-managed and widely distributed payment system such as M-Pesa will definitely boost binary options online brokerage business in Kenya.