Despite coin.dance reporting a spike in bitcoin trading in Kenya on the week of 3 December, 2016 reaching KSh11.4 million (US$114,000), a lack of cooperation between regulators and blockchain players threatens to stifle innovation.

In Kenya, the Central Bank has held its position on bitcoin as an unregulated currency and continues to caution locals in engaging with the cryptocurrency.

This announcement has adversely affected BitPesa, one of the country's biggest bitcoin platforms.

Bitpesa had operated in Kenya for two years before expanding to Nigeria. It sought to integrate with M-Pesa, but the move was blocked by Safaricom.

Elizabeth Rossiello, founder of Bitpesa said that they have had an easier time expanding their bitcoin platform in Nigeria than in Kenya. "Kenya is no longer our biggest market," she quipped in her presentation at the concluded Blockchain Workshop by Coalition of Automated Legal Applications (Coala) held in Nairobi.

Fred Fedynyshyn, Chief Legal and Compliance Officer at Bitpesa said that they are still working with the central bank. "You really don't have to fully understand how a combustion engine works to regulate the taxi industry. Certainly, the Central Bank did not require every single employee to understand how SMS messaging network works before they permitted M-Pesa to start operating."

Fedynyshyn said that to make work easier, regulators could work with innovators to see how the technology is applied in order to craft legislation or rules of engagement.

"It is better to work backwards on how the consumer is using the product and how the product is being deployed into society. It is more straightforward and easier in crafting regulations," he added.

"All the countries we have been in we have seen various levels of interest and different levels of bureaucracy. Even if you are the most selfish regulator in the world and is not interested in your constituents and industry you oversee, you can't understand how this technology is going to be used if you are not willing to listen," Fedynyshyn said.

He vowed that Bitpesa would continue working with regulators in the markets they are in and push the user of cryptocurrency as part of the larger blockchain implementations.