Some Kenyan banks have started sending out warning alerts to customers engaged in cryptocurrency trading to be aware of the associated risks. These warnings have reportedly been sent to customers who have “used their credit and debit cards to purchase cryptocurrencies on crypto exchanges.”
crypto trading risk
according to a local report goodNCBA Bank Kenya, one of the banks, is now advising customers not to “buy, hold or trade in virtual currencies”. NCBA Bank previously said in a warning sent to customers transacting on crypto exchanges:
According to the Central Bank of Kenya (CBK) circular number 14 of 2015, virtual currencies such as bitcoin are not legal tender in Kenya. Therefore, no protection exists for you as our customer in case the Platform holding or trading in cryptocurrency fails or goes out of business.
During the emailed alert, NCBA Bank reiterates common lines used by central banks when attempting to discredit digital currencies. For example, NCBA Bank states that “transactions in virtual currencies are largely untraceable, making them likely to be abused by criminals.”
unregulated crypto exchange
Furthermore, the bank also warned that cryptocurrencies are traded on exchange platforms that are “not properly regulated” and that consumers are at risk of losing all their funds “in the event of the collapse or closure of these exchanges”. While NCBA Bank customers can still transact with cryptocurrency exchanges, the bank still cautions that it “does not approve cryptocurrency transactions.”
Meanwhile, the report speculates that the banks’ latest action could mean that CBK is still angry at cryptocurrencies. For example, in 2015 the central bank issued an advisory ask Kenyans to stay away from cryptocurrency trading. Similarly, in April 2018, CBK warning Bank against transactions in cryptocurrencies.
However, despite these warnings, crypto trading continues to grow in Kenya and some reports state that the country now has the second largest peer-to-peer trading volume on the continent. It remains to be seen whether the actions of Kenyan banks are going to slow down the crypto trading volume.
What are your thoughts on Kenyan banks’ decision to warn customers against dealing with cryptocurrency exchanges? You can share your thoughts in the comment section below.
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