Central Bank of Kenya Still Wary of Cryptocurrencies but Remains Open to Innovation

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Nearly two years after it castigated cryptocurrencies, the Central Bank of Kenya (CBK) has issued a fresh take on the subject. The country’s banking industry regulator has been against virtual currencies like Bitcoin from as early as 2015 due to their somewhat mysterious nature. But the regulator has softened its stance since then.

Kenya’s Central Bank Governor Dr. Patrick Njoroge said this week that risks aside, the banking industry is open to innovation.

In 2015, the CBK issued warnings against the use of Bitcoin, stating that it should not be held liable for any losses incurred by consumers using digital currencies to settle transactions, as they are not considered a legal tender in the country.

The Central Bank warned that transactions in virtual currencies such as bitcoin are largely untraceable and anonymous making them susceptible to abuse by criminals in money laundering.

The regulator stated that virtual currencies are traded in exchange platforms that tend to be unregulated all over the world. Consumers may, therefore, lose their money without having any legal redress in the event these exchanges collapse or close business.

“If you’re the regulator, you have to be careful that all risks are taken care of, including in cryptocurrencies, but we’re very open to innovation,” said Dr. Njoroge in a statement this week.

He was speaking at the Global Financial Forum in Dubai, an event that sought to explore emerging geopolitical, technological and financial trends across the world.



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