Kenya’s central bank governor admits pressure to convert country’s reserves to Bitcoin
Kenya’s central bank governor Patrick Njoroge has admitted to receiving outside pressure from crypto supporters to convert the country’s reserves into Bitcoin (BTC).
According to Njoroge, the idea can be equated with “madness”, 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 hinted that lawmakers may be under pressure to sway 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 jail for it.
“I know you’re under a lot of pressure from some of these people pushing these things [cryptocurrencies] because it’s good for them. I can assure you that I have many people who have pressured me to put our reserves in Bitcoin. <...> I would have been out of my mind with that kind of madness,” Njoroge said.
Option to use cryptocurrencies
Furthermore, Njoroge noted that the country could only choose to adopt cryptocurrencies if they solve a specific problem. He called for a review of the cryptocurrency sector to move away from what he called “hype” around digital assets.
“In our economy, what problem are they solving? Are they better vehicles for let’s say payments, you know, transactions, and the answer is no. Are they better considering the problems? Is its security more than your bank account and the answer is no. We see it as something that might be hyped, but we have to look at it carefully and find out whether it will solve a particular problem or not,” he added.
No laws to manage the crypto sector
Notably, Kenya’s central bank has previously issued warnings to citizens regarding handling cryptocurrencies citing the risks involved. However, there are no comprehensive regulations to govern the sector.
In this case, the institution has largely issued circulars to local banks urging them to exercise caution when handling cryptocurrencies or dealing with firms dealing in digital assets.
The severity of the risk was recently highlighted by a report indicating that a record four million Kenyan crypto investors suffered losses following the ongoing digital asset selloff.
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