Kenya’s Central Banks Sends A Warning Against Cryptocurrency

As discussions continue between government agencies and cryptocurrency protagonists regarding regulations, the Central Bank of Kenya (CBK), with the backing of its Governor, Patrick Njoroge is part of the initiative to slow down the development of Bitcoin and cryptocurrencies.

Last Thursday, Njoroge informed legislator that he sent a warning to all banks regarding the risks involved in cryptocurrencies.  While addressing the National Assembly Committee on Finance at Parliament Buildings, he noted that the circular warned banks about the risks in dealing in cryptocurrencies or carry out transactions with entities that make use of cryptocurrencies.

This is a recurrent warning that the CBK has been engaged in to dampen the passion of citizens from dealing in what is famously known among most investors as a risky venture. In December 2015, the consumer protection concerns motivate CBK to send a notice warning the general public against cryptocurrencies.

However, such warnings are not abnormal to only Kenya or CBK. In a different report, it was stated that the Manager at Nigeria Deposit Insurance Corporation (NDIC) alerted citizens of the lack of regulations and stability in any cryptocurrency investment, deeming them as risky ventures that are not supported by any traditional asset or physical commodity.

Last week, speaking on the same topic, World Bank Group Senior Vice President Mahmoud Mohieldin explained that Blockchain technology might be beneficial to the world but Bitcoin “could be the biggest bubble in history.” The statement goes to highlight the frequent question that pertains to the blockchain technology whether it could be separated from cryptocurrencies and in what way can the technology be applicable without bringing in cryptocurrencies into the picture.