Cryptocurrency

Kenya to create special unit for Cryptocurrency related issues

luno bitcoin account sign up stages
(Last Updated On: May 17, 2018)

Kenya’s Capital Markets Authority (CMA) is proposing the creation of a special unit to handle ICOs and cryptocurrency related issues.

CMA Chief Executive Paul Muthaura said the unit would include all relevant regulators in the financial market in the country.

This is found in Capital Market Soundness Report, “Staying the course in a Turbulent World of Increasing Protectionism,”Standard Digital says.

“There is need for regulators to devise a common approach towards handling issues revolving around cryptocurrencies and Initial Coin Offerings (ICOs),” the report states. “A joint workgroup by financial sector regulators could be put in place to tackle issues around cryptocurrencies and ICOs.”

Strong warning against Initial Coin Offering

Kenya’s capital market regulator February this year (2018) issued warnings to cryptocurrency investors against participating in ICOs.

It said ICOs are unregulated and speculative investments with significant risk exposure.

It’d be recalled that excitement about cryptocurrency and ICOs heightened in 2017 as the world experienced bitcoin boom.

Bitcoin boom boosted the potentials of other digital assets in Africa as the rest of the world.

CBK isn’t the only government’s bank in Africa that warned its citizens against venturing into cryptocurrency.

Nigeria’s financial regulatory body in 2017 issued similar warning, but citizens are defiant to such crypto warnings.

“This volatility in price fluctuation remains a concern even as regulators seek to strike a balance between managing the risks that accompany innovations and avoiding being an impediment to market-led innovation,” CMA noted

CMA noted that regulators must be ready to communicate their willingness to accommodate fintechs to remove the perception that regulators do not appreciate new innovation.

Kenya is open to Blockchain Technology

In a the same vein, the deputy governor of Central bnk of Kenya, Sheila M’Mbijjewe, earlier this month that blockchain technology should be embraced with caution.

She spoke at the the Euromoney East Africa Conference regulating fintechs should be balanced against encouraging innovation so that the technology’s growth does not bring an erosion of public confidence.

“We (CBK) are not the innovators so we cannot move ahead,” M’Mbijjewe said. “If we move behind the market, we will have a problem. Essentially, we have to move alongside innovations.

Recalled that CBK Governor Patrick Njoroge also told Kenyan lawmakers earlier this month that all financial institutions in the country should wary of dangers of virtual currencies.

Nigerian CBN has also issued similar warning to banks in Nigeria, but cryptocurrency investors in Nigeria are still able to buy bitcoin and ethereum with their debit card.

Some of the popular trading platforms include luno, nairaex, remitano, ngexchanger.

About the author

Opeyemi Quadri

Add Comment

Click here to post a comment

Your email address will not be published. Required fields are marked *