True to their innovative spirit, over the past few years, many Kenyans have joined in on the cryptocurrency gold rush that seems to have swept across the world. This enthusiasm, however, is not shared by the Central Bank of Kenya (CBK), which issued the following stern warning: ‘This is to inform the public that virtual currencies such as Bitcoin are not legal tender in Kenya and therefore no protection exists in the event that the platform that exchanges or holds the virtual currency fails or goes out of business….
The public should therefore desist from transacting in Bitcoin and similar products.’1 This warning falls short of making trading of virtual currencies illegal, as countries such as China, Bangladesh, Nepal, and Kyrgyzstan have done,2 but it does not legitimise it either. Notwithstanding this disapproval from the CBK, Kenyans have continued trading and holding cryptocurrencies and the country is now estimated to hold more than KES 163 billion worth of Bitcoin, equating to 2.3% of Kenya’s GDP.3 1 CBK Warning on virtual currencies such as Bitcoin, December 2015. 2 Bitcoin government regulations around the world. 3 Citibank reports Kenya holds an estimated KES 163 billion worth of Bitcoin.
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