Kenya’s Capital Markets Regulator Calls for Crypto Regulations
Kenya’s Capital Markets Authority is rooting for the regulation of the cryptocurrency sector. The body which regulates the capital markets industry cites the “high risk” associated with digital currencies as the reason for its push.
The regulator has previously warned investors against putting their money into cryptocurrencies.
According to the CMA, the proposed body should bring together all the financial regulators like the central bank
“There is need for regulators to devise a common approach towards handling issues revolving around cryptocurrencies and initial coin offerings. A joint working group by financial sector regulators could be put in place to tackle issues around cryptocurrencies/ICOs,” CMA said in its latest report – Staying the course in a Turbulent World of Increasing Protectionism.
Kenya is one of the many countries with no clear regulations on cryptocurrencies.
Central bank governor Patrick Njoroge has only recently warned investors against investing in cryptocurrencies.
The Cabinet Secretary (Cabinet Minister) in charge of ICT has however constituted a taskforce to look into the sector and is expected to present its report in less than two months. Its mandate was set at three months.
Blockchain and Land Registries
Speaking earlier the cabinet secretary noted that blockchain technology had the potential to transform various sectors. Prompted with a question, cabinet secretary for Lands Faridah Karoney said she was considering the use of blockchain technology to transform the sector often marred by corruption and lack of transparency.
Regulators, however, need to be careful so as not to stifle innovation, the regulator says. The goal should be to harness the benefits of the underlying technology, Luke Ombara, an official with the CMA said.
One of the concerns CMA has is the high price volatility. Bitcoin, for instance, has fluctuated from as high as $20,000 in mid-December to below $6000 in February.
“This volatility in price fluctuation remains a concern even as regulators seek to strike a balance between managing the risks that accompany innovations and avoiding being an impediment to market-led innovation,” the report says.
Kenyan tech entrepreneurs have been promoting a digital currency known as Nurucoin mainly on social media sites.