Central Bank of Kenya Governor warns on Virtual Currencies like Bitcoin

Last year, the Central Bank of Kenya released a statement warning Kenyans on virtual currencies like Bitcoin. The Central Bank called  Bitcoin a form of unregulated digital currency that is not issued or guaranteed by any government or central bank. This statement was as a result of a tussle between Safaricom and BitPesa, a  Bitcoin remittances firm based in Nairobi. The statement by the CBK further stated that as the regulator of domestic and international money remittances in Kenya  no entity was licensed to offer money remittance services and products in Kenya using virtual currency such as Bitcoin.

During the MindSpeak forum held this past weekend, the Central Bank Governor Patrick Njoroge affirmed this stance on virtual currencies. The governor stated that Kenya lacks systems to handle virtual currencies as the CBK was yet to come up with proper policies on how to regulate them.  The governor in his argument stated that the block chain technology powering bitcoin was the point of contention with questions on its security.  ‘

What is Bitcoin?

Bitcoin is a global digital currency based on distributed computing instead of gold and banks. Bitcoin has evolved from a term for the nerds and geeks of the world with over $2 Billion transactions daily and over 400,000 businesses accepting the currency.

Bitcoin is particularly revered for its Block Chain technology. For those who are less familiar with the ins and outs of the currency, blockchain is a “general log of transactions” on which “you can see all transactions that have ever taken place or ever will take place.” In other words, if Bitcoin is used in a financial transaction, that transaction is permanently recorded in a public space which is an incorruptible universal record and tracking system.