Amid Kenya being the most prominent country at the forefront of the crypto revolution sweeping through Africa. A select few of Kenyan banks have started sending warning alerts to their customers who have used their credit and debit cards to buy cryptocurrencies on crypto exchanges.
Reportedly, some of these banks have gone ahead to warn their customers on the dangers of cryptocurrencies, also advising them not to buy, hold, or trade in virtual currencies.
Recall that the central Bank of Kenya (CBK) put out an internal circular to all Kenyan banks warning them to stay away from cryptocurrency transactions or face penalties from non-compliance.
As a result of the CBK’s report circulated, NCBA Bank Kenya Plc sent out an email to clients who have previously transacted on crypto exchanges.
Here is an excerpt from the email:
“In accordance to Central Bank of Kenya’s circular No. 14 of 2015, virtual currencies such as Bitcoin are not legal tender in Kenya. No protection therefore exists for you as our customer in the event that the platform holding or trading in cryptocurrency fails or goes out of business.”
Some of the risks that are associated with holding, buying or trading in virtual currencies include:
Transactions in virtual currencies are largely untraceable, making the susceptible to abuse by criminals.
Virtual currencies are traded in exchange platforms which are not properly regulated all over the world. Consumers may therefore lose their money without having any legal redress in the event these exchanges collapse or close business.
There is no backing of assets, the value of virtual currencies is speculative in nature, and this exposes users to potential losses.
NCBA Bank does not approve cryptocurrency transactions done using your Card or transact with institutions trading in virtual currencies.
Safeguard your finances by not buying, holding or trading in virtual currencies.
If you require more information, please reach out to your Relationship Manager, or our service champions.