- Central Bank of Kenya cautions financial institutions against cryptocurrency.
- The body claims that cryptocurrency lacks regulation and is not recognized as legal tender.
Kenya: On Friday 13th April, Standard Digital, a local news source, reported that the Central Bank of Kenya (CBK) has recently released an information in which it warned all banks and financial institutions within the country to desist from dealing with digital currencies or engaging in any crypto related transactions with anybody.
Patrick Njoroge, who is the governor of the Central Bank of Kenya, released the circular while speaking with the National Assembly Committee on Finance. He mentioned that the warning issued by the CBK is in line with warnings from other financial regulators over the world. He said:
“The actions of CBK are consistent with those taken by other regulators globally, most of whom have taken a cautious approach towards crypto-currencies.”
Patrick quoted the prevalence of cryptocurrencies in illegal activities, its anonymity, and its lack of centralized control as the driving force towards the ban of cryptocurrency:
“There are risks associated with cryptocurrency particularly on consumer protection, fraud, hacking and loss of data and they are prone to be used as pyramid scheme.”
Although, Patrick expressed his full support for technological innovations, however, he mentioned that some of these innovations could be unsafe and risky for the financial sector.
The Central Bank of Kenya had earlier warned its citizens back in Dec. 2015 against Bitcoin and other digital currencies, claiming that cryptocurrency lacks regulations and is not recognized as a legal tender.
Prior to this news, the central bank of China, last September, warned against the dangers inherent in ICOs, while the Reserve Bank of India announced last week that it would stop all transactions with cryptocurrency-related accounts.
Is this action by the Central Bank of Kenya in favour of the populace or a further clamp down on cryptocurrencies? Tell us your opinion in the comment box.