Most African nations stand to gain a lot from embracing Bitcoin and other cryptocurrencies. Local central banks, however, aren’t too keen on this idea and will continue to oppose this idea for as long as possible. Kenya’s central bank is proving to be quite a stubborn entity in this regard. The latest warning issued by this institution leaves nothing to be desired. A stain on the otherwise vibrant Bitcoin economy in the country, though.
In a way, it is not surprising to see the Kenyan central bank oppose Bitcoin. Many financial institutions around the world share this attitude, for some reason. It is also a big problem, as such a negative stance hinders growth and won’t allow the economy to flourish. Given Kenya’s fintech passion and the innovative startups growing in number, there is no reason to stifle innovation whatsoever. Unfortunately, a Bitcoin-unfriendly bank can make things go from bad to worse pretty quickly.
Another Central Bank Opposing Bitcoin
It has been somewhat rough for Bitcoin companies in Kenya these past few years. BitPesa is no longer providing their service in this country since a few months. Any Bitcoin business cannot open or maintain a bank account whatsoever. This means processing payments in local currency is impossible. A very odd decision by the central bank, but they clearly want nothing to do with Bitcoin whatsoever. The same issue affects Luno, a Bitcoin exchange and wallet service provider.
Moreover, the recent warning by the CBK isn’t helping much either. The institute warned the general public against the use of Bitcoin. They rehash the same non-facts we have heard before, such as the association with money laundering. This news comes at an unfortunate time for the cryptocurrency industry in Kenya. Moreover, their restriction involving local banks not providing bank account sot Bitcoin companies is absolutely baffling. It appears the CBK doesn’t want the country to do well financially.
It will be interesting to see how this situation in Kenya evolves in the coming years. The consumers want more Bitcoin-related services and support, that much is rather evident. Unfortunately, the central bank has no plans to make things easier for companies in this regard. That is very unfortunate, but there is little to be done right now. Finnovating for Africa is a report which shows how attractive cryptocurrency is to investors. It is a shame Kenya doesn’t want to be a part of this influx of new capital.
Header image courtesy of Shutterstock