Central Bank says Bitcoins illegal, not regulated in Kenya

The Central Bank of Kenya has warned against use of Bitcoin saying it is not a legal tender in the country.

In a statement, CBK said only Kenyan bank notes and coins are recognized as legal tender warning Kenyans against trading or holding the Bitcoin virtual currency or other similar currencies.

CBK says Bitcoins and other virtual currencies are not regulated in Kenya and they are not issued or guaranteed by any Central Bank.

Bitcoin is a form of digital currency, created and held electronically.

CBK says some transactions in virtual currencies such as Bitcoin are largely untraceable and anonymous making them susceptible to abuse by criminals in money laundering and financing of terrorism.

It also points out that virtual currencies are traded in exchange platforms that tend to be unregulated all the world and consumers may lose their money without having any legal redress in the event that exchanges collapse or close business.