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The attention of the Central Bank of Kenya (CBK) has been drawn to media reports

on the use, holding and trading of virtual currencies such as Bitcoin in Kenya.

Bitcoin is a form of un-regulated digital currency that is not issued or guaranteed by

any government or central bank. Domestic and international money transfer

services in Kenya are regulated by the Central Bank of Kenya Act and other

legislation. In this regard, no entity is currently licensed to offer money remittance

services and products in Kenya using virtual currency such as Bitcoin.

This is to inform the public that virtual currencies such as Bitcoin are not legal

tender in Kenya and therefore no protection exists in the event that the platform that

exchanges or holds the virtual currency fails or goes out of business. Some of the

risks associated with buying, holding or trading virtual currencies include the

following:

 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.

 Virtual currencies are traded in exchange platforms that tend to be unregulated

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 underlying or backing of assets and the value of virtual currencies is

speculative in nature. This may result in high volatility in value of virtual

currencies thus exposing users to potential losses.

CBK reiterates that Bitcoin and similar products are not legal tender nor are they

regulated in Kenya. The public should therefore desist from transacting in Bitcoin

and similar products.

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