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Kenya Has Two Weeks to Decide Whether to Regulate Cryptocurrencies

Kenya Has Two Weeks to Decide Whether to Regulate Cryptocurrencies

Kenya’s Treasury Secretary has been tasked with the responsibility of investigating the current state of cryptocurrency adoption in the country, which has so far been growing with no regulations. In a couple of weeks, he is to give his report to parliament, advising them how to proceed with regulating cryptocurrencies.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Decision in Two Weeks

Kenya Has Two Weeks to Decide Whether to Regulate Cryptocurrencies
Henry Rotich.

The Kenyan parliament has reportedly given Treasury Secretary Henry Rotich two weeks to decide whether cryptocurrencies need to be regulated, Business Daily Africa reported on Wednesday.

The Finance and National Planning Committee questioned Rotich about the use of bitcoin in the country. Specifically, the committee asked “why the Treasury and the Central Bank of Kenya (CBK) allowed people to venture into the unregulated cryptocurrency space without being licensed to operate and taxed,” the news outlet detailed and quoted the chairman of the committee, Joseph Limo, saying:

We are surprised to hear that even the CBK is not aware that there is a lounge at Kenyatta University, an ATM in town, and a hotel in Nyeri which trade in bitcoins. There is a bigger problem in Kenya since people are trading billions in virtual space yet the Treasury has not licensed and taxed it like trade in M-Pesa and bank transactions.

When to Start Regulating

Rotich admitted that there is a lot of interest in cryptocurrency, adding that he will look into whether there are crypto exchanges operating in the country. So far, “I am not aware of people operating locally…But I will endeavour to find out whether we have local exchangers,” the publication quoted him.

After explaining that the central bank will identify any local crypto exchanges and evaluate their risks to see whether regulation is needed now or later, he asserted:

The issue of cryptocurrencies is evolving and we can take a position as a country. This is a delicate balance between supporting innovation and killing it.

Parliament’s Concerns about Crypto

Capital Business also reported on Wednesday that “Molo Constituency Member of Parliament Kimani Kuria wants cryptocurrencies such as bitcoins to be regulated due to risks associated with digital currencies.”

Kenya Has Two Weeks to Decide Whether to Regulate CryptocurrenciesCiting that “cryptocurrency transactions are anonymous,” Kuria claims they “can easily be used by corrupt government officials seeking to hide fraudulent money.”

He proceeded to describe, “A person who has billions of money acquired wrongly needs only to buy several bitcoins which can store value in a system that lacks centralized outsight. He then could go to another country, recover his money and move on with life.”

In answering a question by the Finance and National Planning Committee, Rotich was “hesitant to respond on the government’s capacity to monitor and regulate cryptocurrency transactions conducted within the Kenyan borders,” the news outlet described. However, he elaborated:

Unlike other investment avenues, cryptocurrencies are not regulated by any government authorities. Due to their unregulated nature, limited understanding of the cryptocurrency and the influx of companies engaging in it, it is prone to abuse by criminals, terrorists and extortionists who are taking advantage of the unregulated space.

What do you think Kenya will do about cryptocurrencies? Let us know in the comments section below.

Images courtesy of Shutterstock and Wikipedia.

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Tags in this story
adoption, ATM, Bitcoin, BTC, Central Bank, crypto, Cryptocurrency, Digital Currency, Exchanges, Kenya, kenyatta, N-Economy, parliament, Regulations, Virtual Currency
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Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.