Bitcoin and cryptocurrencies are a puzzle especially for regulators. Over the last 4 years our dear Central Bank Governor, Dr. Patrick Njoroge has consistently been opposed to the idea of cryptocurrencies. He issued 2 damning public notices warning the public to stay away and another circular expressly requesting banks to choke any value transfer activity related to cryptocurrencies.
As per the Central Bank of Kenya Act, he is well within his right. A bank is a regulated private business. You cannot compel a bank to take you as a customer or take your business. Thus, every once in a while, the governor pulls out his trump card to remind us who is boss.
But mounting pressure has pinned the old man against the wall, forcing him to revisit his dogmatism. An article from the Standard dated May 23rd titled “CBK Warms Up to Cryptocurrencies” read
“CBK Governor Patrick Njoroge said the regulator was open to introducing cryptocurrencies such as bitcoin as alternative payment vehicles with the opportunity to reduce fraud.”
While in the past, all the the financial instruments that intermediary companies use for fund transfers were based on fiat currencies, in the forms of cash, bank deposits and electronic money – it is no longer the case with the advent of Bitcoin.
Rather than fight change, the Central Bank of Kenya now seems to be reconsidering its stance on cryptocurrencies as a radically new way of high-speed, low-cost value transfer independent of traditional financial intermediaries.