The United Nations Conference on Trade and Development (UNCTAD) has asked the Kenyan Government to introduce mandatory registration of cryptocurrency exchanges to ensure the safety of users.
The UNCTAD, in a report titled All That Glitters, Is Not Gold urged the government to protect Kenyans from rogue dealers who swindle them.
UNCTAD also advised the government to ban advertisements of cryptocurrency businesses on social media.
This recommendation follows the ranking of Kenya as fifth in digital currency ownership in the world.
The UNCTAD raised concerns that the rapid growth of the cryptocurrency business in the country may leave users at risk of fraud and other sharp practices.
By banning adverts, UNCTAD said that the government will be able to regulate the industry that has become attractive to many people across the globe.
This is in addition to helping the government generate tax from digital currency users.
“Creating a public payment system to serve as a public good, such as a central bank digital currency.
“In the light of the regulatory and technological complexity of central bank digital currencies and the urgent need to provide safe, reliable, and affordable payment systems, authorities could also
examine other possibilities, including fast retail payment systems,” the UNCTAD said.
It also argued that the business model of cryptocurrency can lead to major losses.
“This new type of virtual, and often disguised, advertisement requires policymakers to expand the scope of regulation beyond traditional media.
“This is an urgent need in terms of consumer protection in countries with low levels of financial literacy, as even limited exposure to cryptocurrencies may lead to significant losses,” read the UNCTAD report in part.
A UN report released last month ranked Kenya fifth among the top 20 economies in the cryptocurrency market share.
According to the report, over 4.25 million people, representing 8.5 percent of the country’s population own cryptocurrencies.
“The cryptocurrency ecosystem expanded by 2,300% between September 2019 and June 2021, particularly in developing countries.
“According to some estimates of digital currency ownership, in 2021, 15 of the top 20 economies in this field were emerging market and developing economies,” the report read in parts.