Authorities have been cautious and suspicious about the use of Cryptocurrency in Kenya. For instance, the Central Bank of Kenya released a memo warning Kenyans about the possible use of cryptocurrency in Kenya.
“This is to inform the public that virtual currencies such as Bitcoin are not legal tender in Kenya and therefore no protection exists in the event that the platform that exchanges or holds the virtual currency fails or goes out of business,” the Central Bank statement read in part.
The Central Bank of Kenya went a head and listed some of the risks that comes with the use of cryptocurrency in Kenya. The bank of last resort for Kenya went a head and warmed prospective early adopters that they may lose their investments if they engage in cryptocurrency.
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This stern warning in form of a memo was issued in December 2015. That strong worded warning notwithstanding, Kenya is known to be leading in terms of volume of cryptocurrency transactions in Sub Saharan Africa. The other giants in the cryptocurrency business is Nigeria and South Africa. In 2018, it was estimated that Kenyans had invested an equivalent of 2 percent of the country’s Gross Domestic Product (GDP) in cryptocurrencies.
Central Bank of Kenya was not alone in issuing stern warnings against use of cryptocurrency in Kenya. On 21 Feb 2018, the Capital Markets Authority warned investors against participating in Initial Coin Offerings. They said that these were unregulated and speculative investments.
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