Kenya’s Capital Markets Authority (CMA) proposed the creation of a special cryptocurrency unit. Their goal would be to handle issues relating to virtual currencies. Membership in the special unit would include relevant regulators like the securities regulator and the country’s central bank. Chief executive officer of the CMA, Paul Muthaura, released the proposal in a report.
According to the CMA, ongoing offerings are speculative and unregulated. They believe these investments can possess considerable risk for investors. Already, investors have been warned by the CMA against participating in ICOs – Initial Coin Offerings.
Per the CMA, the benefit of a special cryptocurrency unit includes regulators would be in a position of devising a common approach. This would better help handling issues that revolve around Initial Coin Offerings and virtual currencies. However, the CMA noted a need to demonstrate importance for regulators to communicate willingness and desire of accommodating financial innovations. They would like to dispel the perception they are against new technologies.
“There is room to develop international regulatory principles for crypto assets including ICOs. The goal should be to harness the potential of the underlying technology,” said Luke Ombrar, director of strategy and regulatory policy at CMA.
Central bank warning
Last month, Kenya’s central bank warned the country’s commercial banks. They asked them to avoid engaging in transactions involving cryptocurrency-related entities and even dealing in digital currencies. The governor of the Central Bank of Kenya, Patrick Njoroge, later echoed this sentiment while meeting the finance committee of the National Assembly.
According to Njoroge, CBK stance was consistent with other regulators worldwide. Njoroge shared that some cryptocurrency ricks include their anonymous nature, which also makes them attractive for illegal activities. At the same time Njoroge expressed his support for the technology behind virtual currencies.
Earlier in the month. the deputy governor of the Central Bank of Kenya, Sheila M’Mbijjewe, indicated that embracing blockchain technology should be done cautiously. Speaking during the Euromoney East Africa Conference, M’Mbijjewe added that financial technologies should balance. His thoughts were to encourage innovation, while at the same time curbing features that could result in the erosion of public confidence.