Central Bank of Kenya warns over unauthorised currencies, Bitcoin

NAIROBI, KENYA: The Central Bank of Kenya has warned over the use, holding and trading of unauthorised virtual currencies.
This is in light of emerging reports that several domestic and international money transfer services have been transacting using virtual currencies like Bitcoin.
Bitcoin is a form of unregulated digital currency that is not issued or guaranteed by any government or central bank.
CBK has insisted that it is the soul regulator of domestic and international money transfers services as per the CBK Act.
"In this regard, no entity is currently licensed to offer money remittances services and products in Kenya using virtual currency such as Bitcoin," read a statement by CBK.
CBK further alerted the public that they should be aware of such currencies as they are not a legal tender in the country therefore no protection exists in the event that the platform that exchanges or holds the currencies fails or goes out of business.
"Virtual currencies are majorly traded in unregulated platforms globally. Consumers may therefore lose their money without having any legal redress in the event these exchanges collapse or close business," added CBK.
Transactions in virtual currencies are largely untraceable and anonymous making them susceptible to abuse by criminals in money laundering which allegedly is used to finance terrorism.
In these transactions, there is no underlying or backing of assets despite the value of virtual currencies is speculative in nature. This may result in high volatility in value of virtual currencies thus exposing users to potential losses.
Early this month, Australian police raided the Sydney home and office of a man named by Wired magazine as the probable creator of bitcoin and holder of hundreds of millions of dollars worth of the cryptocurrency.