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Central Bank of Kenya recommends gradual adoption of digital currencies

According to latest reports, Central Bank of Kenya (CBK) Governor Patrick Njoroge has once again issued a warning against the rapid adoption of digital currencies such as bitcoin in the country.

Standard Media reported that Njoroge has recommended that the country must go slow in adopting digital currencies, adding that Kenya currently doesn’t have systems and capabilities to handle the technology.

Speaking at the monthly interactive forum ‘Mind Speak’ hosted by investment analyst Aly Khan Sachu, Njoroge issued the statements in response to a question by one of the participants who wanted to know the status of the bank’s efforts to come up with the mechanisms for the adoption of virtual currencies.

The bank is yet to formulate the framework for digital currency regulation. In a public notice issued in December 2015, the central bank had said:

“Bitcoin is a form of un-regulated digital currency that is not issued or guaranteed by any government or central bank. 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 notice further highlighted the risks associated with digital currencies including their use for money laundering and terrorism financing, loss of money in the event of shut down of exchanges, and high volatility in value of virtual currencies exposing users to potential losses.

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