We are open to innovations, but conscious of potential risks – Central Bank

The Central Bank of Kenya Governor Dr. Patrick Njoroge says they are open to innovation within the financial sector in enhancing financial inclusion but remain conscious.

In his presentation the Global Financial Forum in Dubai, Njoroge said “If you’re the regulator, you have to be careful that all risks are taken care of, including in cryptocurrencies. We are open to innovations, but conscious of potential risks.”

Njoroge noted that with the emergence of cryptocurrencies, ‘We are careful because there are certain things which you would not want your country to be exposed to’ the use cryptocurrencies should be done in a way that appropriately protects the interests of the public.

Speaking during a session on Financial Reforms in Emerging Markets, he said, “Not once have I stepped in a  bank. All my transactions are on a phone.”

He said financial inclusion in the country currently at 75.3 percent with internet penetration at 88 percent has allowed the efficient adaptability of mobile banking services. “It is really remarkable. The change has resulted in complete transformation,” he told the delegates.

In Kenya, CBK warned against the use of Bitcoin because it is not issued or guaranteed by any government or central bank.

According to the CBK in a 2016 notice to the public “Domestic and international money transfer services in Kenya are regulated by the Central Bank of Kenya Act and other legislation. In this regard, no entity is currently licensed to offer money remittance services and products in Kenya using virtual currency such as Bitcoin.”

Bitcoins, unlike other currencies, are currencies that are banked virtually on the internet. Bitcoins, therefore, are not found in the banks but transacted and stored on the internet.