Central Bank of Kenya Advises Public to Desist from Using Bitcoin
- The Central Bank of Kenya (CBK) has issued a public notice titled, "Caution to the Public on Virtual Currencies Such as Bitcoin".
The Central Bank of Kenya (CBK) has issued a public notice titled, "Caution to the Public on Virtual Currencies Such as Bitcoin".
In it, the Bank emphasizes that bitcoin is unregulated and "not issued or guaranteed by any government or central bank." Therefore:
"No protection exists in the event that the platform that exchanges or holds the virtual currency fails or goes out of business."
It goes on to highlight several risks posed by virtual currency, including its anonymity, lack of traceability, use by criminals and its trade on unregulated exchanges. There is also no "underlying or backing of assets" and its value is speculative in nature. Therefore, it is also subject to high Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term.
The notice does not prohibit Bitcoin but does discourage the public from using it, concluding:
"The public should therefore desist from transacting in Bitcoin and similar products."
For the most part, Kenya's notice is fairly similar content-wise to most other warnings made by governments about virtual currency over the years. However, the vast majority of warnings stopped short of explicitly discouraging its use.
Kenya is home to a number of digital currency initiatives, such as BitPesa. The country is a hotspot for the development of alternative Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term systems for unbanked populations, particularly mobile-based banking.
The Central Bank of Kenya (CBK) has issued a public notice titled, "Caution to the Public on Virtual Currencies Such as Bitcoin".
In it, the Bank emphasizes that bitcoin is unregulated and "not issued or guaranteed by any government or central bank." Therefore:
"No protection exists in the event that the platform that exchanges or holds the virtual currency fails or goes out of business."
It goes on to highlight several risks posed by virtual currency, including its anonymity, lack of traceability, use by criminals and its trade on unregulated exchanges. There is also no "underlying or backing of assets" and its value is speculative in nature. Therefore, it is also subject to high Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term.
The notice does not prohibit Bitcoin but does discourage the public from using it, concluding:
"The public should therefore desist from transacting in Bitcoin and similar products."
For the most part, Kenya's notice is fairly similar content-wise to most other warnings made by governments about virtual currency over the years. However, the vast majority of warnings stopped short of explicitly discouraging its use.
Kenya is home to a number of digital currency initiatives, such as BitPesa. The country is a hotspot for the development of alternative Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term systems for unbanked populations, particularly mobile-based banking.