Cryptocurrency technology using bitcoins.[pHOTO/pulselive.co.ke]
The popularity and allure of cryptocurrencies, particularly bitcoins, has caused a lot of anxiety among conventional bankers and regulators globally even as more people accept them as means of exchange.
Central Bank of Kenya (CBK) has, for instance, said on several occasions that the craze with the digital currency created in 2009 could affect Kenyans same way pyramid schemes did.
It considers cryptocurrencies risky because they may leave consumers unprotected and has been sending such warnings since 2015. In 2016, the banking sector regulator issued a statement warning against the use of bitcoin because it is not issued or guaranteed by any government or central bank.
It made the move after a court battle between Safaricom and a local bitcoin remittances company. The telco had blocked the bitcoin trader from using its platform for transactions. But a recent surge in demand for bitcoins amid fears of a bubble has put digital money on the spot once again amid a growing appetite locally for the new currency that was created by an unknown person using the alias Satoshi Nakamoto.
Other countries have, however, raised concerns about digital currencies. Buyers should be aware they run the risk of losing all their capital. Already it seems like Chinese government has started an all-out war against bitcoin and other digital currencies by banning fundraising through initial coin offerings (ICO) and shutting down all mainland digital currency exchanges.