Kenya's Treasury To Decide if Cryptocurrency is Legal Tender

Kenya’s Treasury To Decide if Cryptocurrency is Legal Tender

Kenya’s Parliament gave the country’s treasury secretary, Henry Rotich a period of two weeks to make decisions regarding cryptocurrency, especially bitcoin in terms of their acceptance as legal tender and other regulations.

The Finance and National Planning Committee questioned the treasury about the use of bitcoin and other cryptocurrencies in the country and why they were allowing the population to trade and invest in these unregulated currencies that lack licenses and taxation.

The Chairman of the committee, Joseph Limo, was quoted

We are surprised to hear that even the CBK is not aware that there is a lounge at Kenyatta University, an ATM in town, and a hotel in Nyeri which trade in bitcoins. There is a bigger problem in Kenya since people are trading billions in virtual space yet the Treasury has not licensed and taxed it like trade in M-Pesa and bank transactions.

In December 2015, the Treasury did issue a notice to the public stating that cryptocurrencies were not legal tender in the country and no protection would be provided in case of any issues or failure of these currencies.

The Parliament’s main concerns come from the need of regulation because of the risks associated with these cryptocurrencies. Member of Parliament, Kimani Kuria stated,

Cryptocurrency transactions are anonymous and they can easily be used by corrupt government officials seeking to hide fraudulent money.

Rotich did express concern over the volatility of cryptocurrency, by pointing out how dramatically the price of bitcoin has fallen over the last few months and doesn’t take it to be a positive sign towards the classification of cryptocurrencies as a legal tender.

He also said,

I am not aware of people operating locally. But I will endeavour to find out whether we have local exchangers. The issue of cryptocurrencies is evolving and we can take a position as a country.

Rotich also believes that there is no regulation of cryptocurrencies by government authorities and therefore it is prone to abuse by criminals, terrorists, and others. This two week period will require Rotich to deeply investigate the situation in the country and present a report to the Parliament of the Treasury’s stance on cryptocurrencies and their classification as legal tender.

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Pallavi Janiani

Pallavi Janiani

Content Writer
I am studying Business and psychology at the university of Minnesota. Apart from learning about how the economy and the human mind works, I spend my time dancing with my bollywood fusion team, reading, writing, traveling, usually with a cup of coffee in my hand.