Blow to Facebook as Kenya Says No to Digital Currency

Central Bank of Kenya (CBK) Governor Patrick Njoroge.PHOTO/COURTESY

Facebook, the global social media giant, has been dealt a blow as Kenya joined growing global voices against the platform’s plan to launch a digital currency next year.

Central Bank of Kenya (CBK) Governor Patrick Njoroge announced that Kenya was not about to allow the use of virtual money, popularly known as cryptocurrency, as a legal tender.

On June,8, Facebook announced its plans to launch a digital coin to be called Libra next year. The move has however received opposition by central banks globally, including the Federal Reserve of the US, who fear the adoption of the social media’s currency by its more than 2.3 billion users could disrupt the global financial system.

“We are still miles away from having solutions to those things (cryptocurrency). But I know there’s a lot of interest particularly with the new product that Facebook has recently announced,” CBK Governor Patrick Njoroge said.

Facebook CEO Mark Zuckerberg. PHOTO/COURTESY

“That actually is miles away from any regulation, including the Fed (central bank of the US) which just recently said (Facebook’s cryptocurrency plan) needs to be paused. The risks are phenomenal and we need to understand the risks better before making a statement.”

Dr Njoroge said Kenya has been in touch with global counterparts under Switzerland-based Bank for International Settlements (BIS) — bank of central banks — and the G20 Finance Ministers and Central Bank Governors Meeting where Kenya is occasionally invited as a guest.

“We collaborate with other central banks in the world. So in those sort of fora, we are working with other central banks to deal with regulations of cryptocurrency,” the CBK chief said.

Concerns have been raised over the possible risks posed by Libra to data privacy, consumer protection and money laundering controls.

Leave a Reply

Your email address will not be published. Required fields are marked *