One of the greatest threats in the cryptocurrency sector, given its ever-changing structure, is a lack of effective regulation in some African countries.
This might drive businesses out of business quickly due to no fault of their own, but regulation is just what the industry requires.
However, numerous African countries, like Nigeria, Egypt, Morocco, and others, have outright banned digital currency.
Despite this, crypto trading continues to take place in almost every part of these countries. However, prohibiting crypto exchanges, banks, and other financial institutions from dealing in cryptocurrencies or providing services to individuals or businesses relating to cryptocurrencies could have a negative impact on a country’s economy, as the digital currency grows in popularity and is used as the new payment method.
Kenyans should be mindful of the hazards involved with cryptocurrency transactions and trading, according to the governor of the Kenyan central bank. Financial institutions that encourage bitcoin transactions risk losing their licenses, according to the governor.
Patrick Njoroge, the governor of the Central Bank of Kenya (CBK), has stated that his organization continues to oppose bitcoin transactions.
Kenyan people should always be mindful of engaging in extremely volatile asset classes such as cryptocurrency, according to the governor.
Njoroge, who was speaking to Kenyans at the World Consumer Rights Celebration Day, said that investing in cryptocurrency is only helpful to a select people, according to the East African daily. He gave an explanation.
He went on to say that some individuals are thrilled about cryptocurrencies because they perceive it as a type of investment in which they may make a lot of money because prices are rapidly rising, so they believe they will get a lot of money back. However, he believes that this is why, for every individual who succeeds, there are hundreds who fail.
Njoroge further stated that cryptocurrency transactions are not only uncontrolled but may also be unlawful.
The governor is reported in a Kenyan newspaper source as warning banking institutions that they risk losing their licenses if they are detected aiding cryptocurrency transactions.
However as more Kenyans are attracted to digital currencies, the CBK chief reiterated that the bank’s position on cryptocurrencies has not changed.
Previously, reports from Kenya suggested that the CBK had persuaded some banks to issue cautionary notifications to cryptocurrency traders.
According to the East African article, the CBK will only support cryptocurrency transactions if sufficient protections have been put in place to protect the population.
Njoroge stated that they are collaborating with other stakeholders and regulators all over the world to ensure the safety of space.
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