Kenya’s central bank governor Patrick Njoroge has admitted to receiving external pressure from crypto proponents to convert the country’s reserves into Bitcoin (BTC).
According to Njoroge, the idea can be equated to ‘craziness,’ noting that converting the reserves into Bitcoin would be a risk considering the digital asset’s volatility, he said during a meeting with members of parliament on September 19.
He also insinuated that lawmakers might be under pressure to influence the legislative process in favor of adopting cryptocurrencies. Interestingly, the governor pointed out that if the country went the Bitcoin way during his tenure, he was ready to go to prison for it.
“I do know you’re under a lot of pressure from some of these people that are pushing these things [cryptocurrencies] because for them it is good. I can assure you I have a lot of people that have been pushing me to put our reserves in Bitcoin. I would have been out of my mind with that sort of craziness,” said Njoroge.
Possibility of adopting cryptocurrencies
Furthermore, Njoroge noted that the country could only opt to adopt cryptocurrencies if they solve a particular problem. He called for a review of the cryptocurrency sector to move away from what he termed as ‘hype’ around digital assets.
“In our economy, what problem are they resolving? Are they better vehicles for let’s say, payments, you know, transactions, and the answer is no. Are they better in terms of whatever the problems? Is its security more than your bank account, and the answer is no. We see it as sort of something that maybe is being hyped, but we do need to look at it carefully and figure out whether it will resolve a particular problem or not,” he added.
No laws to manage crypto sector
Notably, the Central Bank of Kenya has previously issued warnings to citizens regarding dealing with cryptocurrencies citing the risks involved. However, there exist no comprehensive regulations to manage the sector.
In this case, the institution has mostly issued circulars to local banks urging them to take caution when dealing with cryptocurrencies or transacting with firms dealing with digital assets.
The severity of the risks was recently highlighted by a report indicating that a record four million Kenyan crypto investors suffered losses following the ongoing digital assets market sell-off.