Kenya’s Central Bank Warns Against Cryptocurrency, Supports Blockchain

Kenya’s Central Bank Warns Against Cryptocurrency, Supports Blockchain

Following what the institution called massive price volatility in the sector, the Kenyan National Bank has issued a circular to warn financial institutions in the country. The governor of the Central Bank of Kenya revealed this when he appeared before the nation’s parliament, domestic news outlets reports.

CBK, Kenya’s apex financial institution, seeking to discourage interests in digital currencies issued the warning to all banks and business against trading with cryptocurrency. Patrick Njoroge the Central Bank’s Governor is spearheading the campaign to reduce the circulation of bitcoin and other cryptocurrencies.

Local news outlet, Standard Digital reports that Njoroge. while speaking to the country’s National Assembly Committee on Finance stated that “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 schemes,”

Kenya Supportive of Blockchain Technology, wary of Financial Crimes

Njoroge further disclosed that the CBK has issued a guideline to all commercial banks to appoint a ‘money laundering” reporting officer to check the rise of financial crimes. While speaking to The Star concerning the blockchain technology, Njoroge noted that Kenya would always support innovative technologies however, the country should be well are that new and emerging technology usually carry enormous risks to the financial sector.

This is not the first time Kenya’s apex bank is moving to discourage the use of cryptocurrency in the country. It can be recalled that on December 15th, CBK declared that transacting in cryptocurrency offers limited protection which could be exploited by criminals for money laundering, financing terrorism etcetera.

Reacting to the nation-wide warning, the former Executive Director of Bitcoin Foundation Jon Matonis said ironically that These types of government-issued warnings are always amusing because they act as if their own monopoly legal tender is the paragon of safety and stability while simultaneously ignoring the actual, real consumer benefits of Bitcoin.” 

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