The governor of the Central Bank of Kenya Dr Patrick Njoroge said on Thursday that the bank’s position on the unrestricted use of cryptocurrencies like Bitcoin in Kenya remains unchanged.
The latest comments by the governor is a reiteration of the regulator’s long-held stance against the use of cryptocurrencies in Kenya.
“Our position has not changed on any of those products that are out there..” Dr Patrick Njoroge told reporters after the monetary policy announcement where the monetary policy committee retained the base lending rate at seven per cent for a record 12th time.
The Central Bank of Kenya has issued circulars to local banks warning them against dealing with cryptocurrencies or transacting with firms dealing with cryptocurrencies. The latest of such circular was in 2018, as reported by The Kenyan Wall Street.
Banks in Kenya have been clamping down on customers using bank accounts for crypto transactions with some of them sending notices to customers purchasing cryptocurrency, warning them of permanent closure of accounts according to BitKE.
Despite the anti-crypto stance by the Central Bank, Kenya leads Africa in crypto adoption and is ranked five in the world ahead of some of the developed countries like United States, China, Russia and South Africa according to the latest report by Chainalysis.
Kenya is also ranked number one when it comes to to peer-to-peer (P2P) cryptocurrency transaction volumes according to the2021 Global Crypto Adoption Index by Chainalysis. P2P trading is the act of buying and selling cryptocurrencies directly between users, without a third party or intermediary.
P2P trade volume makes up a significant percentage of all cryptocurrency activity in Kenya because of the ban by the Central Bank.
Central Bank of Kenya on CBDCs
However, the Governor seems quite open to the possibility of the technology that powers crypto and the entire industry. In the briefing, he said that they will be making more disclosures about the space in the near term.
In November 2021, we reported that Kenya was keen on exploring the use of central bank digital currency (CBDC) to settle cross-border payments according to the country’s Central Bank Governor Dr Patrick Njoroge.
A Central bank digital currency (CBDC) is money that exists solely in electronic form, issued and regulated by the nation’s monetary authority and backed by the government.