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The Capital Markets Authority (CMA) in Nairobi, Kenya, has proposed the creation of a particular unit to deal with cryptocurrency associated points.
The unit would come with all related regulators akin to itself and Central Bank of Kenya (CBK), based on Standard Digital. The proposal is included within the Capital Market Soundness Report, “Staying the course in a Turbulent World of Increasing Protectionism,” launched Friday by CMA Chief Executive Paul Muthaura.
“There is need for regulators to devise a common approach towards handling issues revolving around cryptocurrencies and Initial Coin Offerings (ICOs),” the report states. “A joint workgroup by financial sector regulators could be put in place to tackle issues around cryptocurrencies and ICOs.”
The CMO issued a discover in February warning traders in opposition to taking part in ICOs, noting it has not permitted any such choices. The regulator mentioned all such choices are unregulated and speculative investments with important danger publicity.
CBK has taken an identical place, warning the general public in opposition to bitcoin, which has skilled broad worth fluctuations. Bitcoin traded at about $17,000 (Sh1.7 million) early this yr earlier than falling to $6,926 (Sh700,000) on the finish of March.
“This volatility in price fluctuation remains a concern even as regulators seek to strike a balance between managing the risks that accompany innovations and avoiding being an impediment to market-led innovation,” CMA famous
Regulators should talk their willingness to accommodate fintechs to take away the notion that regulators don’t respect new innovation, the authority famous.
Sheila M’Mbijjewe, CBK deputy governor, famous earlier this month on the Euromoney East Africa Conference that new applied sciences like blockchain must be embraced cautiously. She mentioned regulating fintechs must be balanced in opposition to encouraging innovation in order that the know-how’s development doesn’t carry an erosion of public confidence.
“We (CBK) are not the innovators so we cannot move ahead,” M’Mbijjewe mentioned. “If we move behind the market, we will have a problem. Essentially, we have to move alongside innovations.”
CBK) Governor, Patrick Njoroge additionally instructed legislators earlier this month that he had warned all banks warning on the risks of digital currencies. In addressing the National Assembly Committee on Finance at Parliament Buildings, he warned banks in opposition to dealing in digital currencies.
In December 2015, CBK issued a discover warning the general public in opposition to digital currencies.
Featured picture from Shutterstock.
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