Kenya’s Financial Institutions Demand Approval of Blockchain-Based Financial Products

Kenya’s financial institutions are soliciting the approval and licensing of blockchain-based products and services. Key industry players as well as market regulators in the financial sector seek for regulations and guidelines for virtual currencies, the blockchain, and online forex trading. The Governor of the Central Bank of Kenya (CBK), Dr. Patrick Njoroge has already revealed that several applications from financial institutions in Kenya soliciting the approval and licensing of blockchain-based products and services have been sent to the central bank.
Patrick Njoroge Governor of CBK revealed at a conference of investment professionals, “A number of banks are currently working on products (and services) hinged on blockchain technology and we think that they offer a lot of promise. We are not anti-innovation or anti-cryptocurrency. We support innovation but are concerned about the impact on financial instability and the inherent risks. CBK is working with central banks all over the world to identify the risks and find ways to mitigate them. The weakest link is where problems in our financial system will start.”
Two months after Kenya’s Cabinet Secretary for ICT, Joe Mucheru announced a blockchain taskforce that was created to give recommendations on how the government can leverage the blockchain Kenya’s financial institutions are soliciting for the approval of blockchain based products. The blockchain whose first known use case was cryptocurrencies such as bitcoin has been utilised over the years to help streamline the delivery of products and services in different sectors by individuals, governments and corporates.
Last year, Kenya’s Capital Markets Authority tried to curb the risks that are linked to online forex and cryptocurrency trading by issuing new regulations. Currently, there only exists one firm in the country that has an online foreign exchange license. Also, the National Treasury’s Director General, Public Investment and Portfolio Management, Esther Koimett, revealed, “Last year the government launched the M-Akiba Bond as an alternative way for Kenyans to invest in Government Securities. Such alternatives need to be encouraged.” Kenya is seeking for ways to improve her financial institutions through regulations and alternative investments. The chairman of the Public Sector Accounting Board (PSAB) by Lazarus Kimang, Bernard Ndung’u has expressed his concerns concerns about alternative investment schemes that would make people vulnerable to fraudsters and thereby make investment opportunities such as bitcoin difficult to access.
 
 

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