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Kenyan Banks Sends Warning To Customers To Avoid Cryptocurrency Trading On Exchanges

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The Central Bank of Kenya (CBK) had sent out a circular to all banks in 2018 warning them against dealing with virtual currencies or entities dealing in digital currencies like Bitcoin.

A directory note was also issued to all commercial banks requiring them to appoint money laundering reporting officers to track and prevent the activities of cryptocurrency traders and exchanges to avoid terrorist financing in the nation.

A select number of Kenyan banks have started sending cautionary alerts to users who have used their credit and debit cards to buy cryptocurrencies on crypto exchanges.

Some of these banks have pushed forward and warned their customers of the dangers of cryptocurrencies urging them not to buy, hold, or trade any virtual currency

The National Cooperative Business Association Bank of Kenya, also known as NCBA Bank Kenya Plc, is a commercial bank in Kenya. It is licensed by the Central Bank of Kenya, located at the country’s capital Nairobi.

NCBA Bank Kenya has sent out warning emails to clients who have previously transacted on crypto exchanges. A few lines from the email reads:

“By Central Bank of Kenya’s circular No. 14 of 2015, virtual currencies such as Bitcoin are not legal tender in Kenya. No protection, therefore, exists for you as our customer if the platform holding or trading in cryptocurrency fails or goes out of business”

Some of the risks that are associated with holding, buying, or trading in virtual currencies include:

Transactions in virtual currencies are largely untraceable, making them susceptible to abuse by criminals.

Virtual currencies are traded on exchange platforms that are not properly regulated all over the world. Consumers may therefore lose their money without having any legal redress in the event these exchanges collapse or close business.

There is no backing of assets, the value of virtual currencies is speculative, and this exposes users to potential losses.

NCBA Bank does not approve cryptocurrency transactions, don’t use your Card or transact with institutions trading in virtual currencies.

Safeguard your finances by not buying, holding, or trading in virtual currencies. If you require more information, please reach out to your Relationship Manager or our service champions.”

                      – NCBA Kenya Bank

Despite these warnings by the Central Bank of Kenya, the adoption of cryptocurrencies has not slowed down. As the world moves toward the adoption of virtual currencies, this seems to be a race against the wind as acceptance of cryptocurrencies around the world and in Kenya grows.

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Data Scientist, Tech Enthusiast and a Crypto Lover