The east African nation is the latest to join in on the debate about digital currencies. The nation has said yes to blockchain technology but no to cryptocurrencies. Patrick Njoroge, the central bank of Kenya governor on Thursday sent a circular to all banks operating in the country warning them of the dangers of dealing with virtual currencies.
While addressing the national assembly on finance, the governor through the circular warned banks of dealing with cryptocurrencies or doing transactions with entities that are involved with virtual currencies.
This isn’t the first time the central bank of Kenya has sought to discourage the Kenyan citizens from involving themselves with what has broadly been described as a risky venture by many regulators around the world. Back in 2015, the CBK issued a notice warning the public against digital currencies like bitcoin.
By doing this Kenya has joined a host of other nations that have sought to protect their citizens from dealing with cryptocurrencies and ICOs. Lack of regulation and volatility of virtual currencies has been cited as the two key factors that have resulted in millions of people around the world losing lots of money. Scammers with phony ICOs also have also been on the rise stealing cash from naïve investors, and, many governments have felt the need to protect their citizens.
A while back, Nigeria Deposit Insurance Corporation warned the Nigerian citizens about the lack of insurance when it came to investing in digital currencies which were very risky and lacked the backing of physical commodities like gold and other precious metals.
Of all nations that have come out and denounced cryptocurrencies, none has outrightly banned the use of the underlying technology that the digital currencies run on. Many nations have been open to the blockchain technology and are studying how they can utilize it for the betterment of their citizens.
However, despite the warning from CBK, it’s worth noting that Kenya is renown for being a forward-thinking nation when it comes to embracing new technologies and finding suitable uses.
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