The Central Bank of Kenya (CBK) has been urged to form a technical working group that will give recommendations to the National Treasury on how to regulate the cryptocurrency industry in the Country.
The recommendation was made by the Joint Financial Sector Regulators Forum (JFSRF) during the forum’s 13th meeting held in Kisumu.
The members noted the significant transformation in the domestic financial sector, presenting a need to form a task force to ensure the stability of the sector.
“While these transformations have immense potential benefits, they also pose risks to the stability of the financial sector, including cyber fraud, data protection issues, consumer protection, and product pricing,” JFSRF said.
The regulators said that the recommendations from the task force will be subsequent to wide consultations and deliberations across the financial sector and other relevant stakeholders.
A recent survey in 154 countries by Chainalysis, a cryptocurrency market research firm based in New York, placed Kenya as the leading country globally, with the highest proportion of residents putting a large share of their overall wealth into cryptos.
This points to the country’s exposure to the ongoing meltdown in the crypto market.
The CBK in February invited public views on the potential introduction of a digital currency, which is a form of cryptocurrency, to offer some benefits, such as reducing cross-border payment costs.
CBDC is a national fiat currency in digital form. This means that if it is introduced, besides the printed cash, CBK will also issue the electronic equivalent.
