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“Use Bitcoins at your own peril,” Warns Central Bank of Kenya

BITCOIN

As the court battle between BitPesa and Safaricom goes on, the Central Bank of Kenya has come forward and commented on the use of bitcoins and other digital currencies in the country. The CBK has said such digital currencies are unregulated and have been linked to money laundering and even terrorism.

In a statement, the CBK said, “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 regulator went ahead to say that such digital currencies expose users to many risk because they are usually not backed up by underlying assets and so their values cannot be established easily. This makes them very dangerous especially for those who have very little experience using them.

““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. The public should therefore desist from transacting in Bitcoin and similar products,” the CBK concluded.

On its part, BitPesa wasn’t expecting the regulator to touch on the legality of Bitcoins and said this in a statement, “The Central Bank of Kenya may or may not make an official statement on digital currencies or Bitcoin during this case, because this case is not about the legality of Bitcoin in Kenya. Rather, it is about BitPesa standing strong against an incumbent, with its internal operations and compliance policies laid bare before the court, proud in its graduation from start-up to scalable contender in the marketplace.”

From the statement by the CBK, it is clear that the regulator has no issues with Bitcoins and other digital currencies in general, it has just warned that no entity is licensed to remit such services so consumers ought to be very careful. I will be keen to see how BitPesa responds to what the CBK has said and see if the regulator takes any action against BitPesa.

Read More: The First Bitcoin Conference In Africa Will Be Held In South Africa This April


About author

Editor at TechArena. I cover all things technology and review new gadgets as I get them. You can reach me on email: kaluka@techarena.co.ke
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