Central Bank of Kenya Warns About Bitcoin In Paid Newspaper Advert

Central Bank of Kenya Warns About Bitcoin In Paid Newspaper Advert

Bitcoinist_Bitcoin Warning Kenya

Now that Bitcoin is gaining more popularity all over the world; the time has come – once again – for central banks to warn about the potential dangers of digital currency. Just a few days ago, a similar warning was issued by the Minnesota Commerce Commissioner. But this time, it’s the central bank of Kenya issuing a statement on trading or holding Bitcoin and other virtual currencies.

Also read: Minnesota Commerce Commissioner Mike Rothman Warns About Bitcoin

Central Bank of Kenya Doesn’t Like BitcoinBitcoinist_CBK Bitcoin

Similar to how most central banks in the world would respond, Kenya’s central bank is not a big fan of the “dangers” represented by Bitcoin and other digital currencies. Bitcoin is not regulated in Kenya at this time, and they are not issued nor guaranteed by any central bank. As a result, people dabbling around with virtual currency should be extra careful with how they manage and spend their money.

What makes this warning so interesting is how the central bank of Kenya has put it as a paid advertisement in the local dailies. This seems to be an indication of how the central bank is desperately trying to keep its customers tied to its ecosystem and is afraid of people looking for alternative financial solutions in the long run.

Among the arguments used in the paid advert are the same things Bitcoin users have heard dozens of times already, such as its unregulated nature and possible regulatory issues. In fact, one part of the advert could be hinting at upcoming Bitcoin regulation in Kenya very soon, as it states:

“Domestic and international money transfer services in Kenya are regulated by the Central Bank of Kenya Act and other legislation. In this regard, no entity is currently licensed to offer money remittance services and products in Kenya using virtual currency such as bitcoin.”

The central bank of Kenya then goes on saying how Bitcoin and other virtual currencies are not legal tender in the country, and how no protection exists in the event of something going wrong. A small list of the risks associated with buying, holding, and trading Bitcoin and other digital currencies are then presented in the paid advert.

Bitcoin Is Not Banned in Kenya ThoughBitcoinist_Central Bank of Kenya

It is important to note that, even though Bitcoin is not legal tender in Kenya, there is no official “ban” on virtual currencies in the country either. Warnings like these are meant to warn the everyday consumer about the possible pitfalls associated with digital currency, and how they should be aware of these risks.

However, the part about how no entity is currently licensed to offer money remittance services is of great importance. While no government officials are commenting on the situation, it looks like Bitcoin regulation could be on the agenda in Kenya at some point. Additionally, this paid advert warning can be seen as an indication as to how Bitcoin adoption is growing in Kenya.

What are your thoughts on this warning issued by the central bank of Kenya? Is regulation coming soon, in your opinion? Let us know in the comments below!

Source: News-Kenya

Images courtesy of News-Kenya, CBK, Shutterstock

Jp Buntinx

Jp Buntinx

JP Buntinx is a freelance Bitcoin writer and Bitcoin journalist for various digital currency news outlets around the world. In other notes, Jean-Pierre is an active member of the Belgian Bitcoin Association, and occasionally attends various Bitcoin Meetups in Ghent and Brussels

  • tiga

    Kenya is Mpesa country noone is going to start using bitcoin here. CBK dont be worried, Safaricom keep earning dont worry

  • KimKim23

    Actually, i believe there is a huge market for bitcoin transactions because of the huge inflows of diaspora remittances. when you transfer money using the traditional methods such as wire transfer or internatinal transfer services such as moneygram and western union, the cost to transfer money gets higher when you transfer a higher quantity of money. This is where bitcoins will come in handy because the cost of transfering $1mil worth of bit coins is the same as when you would transfer $10k because it is all bits of data that you are transfering. It is cheaper to transfer money using bitcoins and this poses a great threat to the Kenyan banking cartel coz they make crazy profits from foreign exchange business with the high fees they charge. bitcoins will change the playing field. So to Tiga’s comment below, bitcoin transfers and exchanges threaten Kenyan banks profit regime in the same way Equitel is a big challenge to Mpesa…flat transfer fees for any amount across banks(Equitel) vs scalled up charges per size of transaction(Mpesa). I also agree with the author of the article regarding potential regulation for bitcoin transfers, but this will be done in a way to bring back the competitive edge to the banks and away from the small bitcoin traders who have been making good money from this.