Central Bank of Kenya governor Patrick Njoroge has described as “craziness” the calls to convert Kenya’s central bank reserves into bitcoin. He added that he would have to be out of his mind before agreeing to this. Njoroge argued that cryptocurrencies like bitcoin are not only volatile but are hardly solving any problem.
The Central Bank of Kenya (CBK) governor, Patrick Njoroge, has described the idea of putting the country’s reserves into bitcoin as “craziness.”
Njoroge, who was addressing recently elected members of parliament, added that if it occurred that he agreed to convert Kenya’s reserves to bitcoin, he should be jailed. The keys to his prison cell must be thrown away.
Central bank reserves for Bitcoin
Under Njoroge’s stewardship, the CBK has issued statements and advisories warning Kenyan residents against trading or investing in cryptocurrencies. In June 2022, for instance, Njoroge and the Central Bank of Nigeria (CBN) deputy governor Kingsley Obiora cited cryptocurrencies’ volatility as one of the reasons they cannot become a widely used payment method.
Yet, despite Njoroge and the CBK’s opposition, several studies have suggested that Kenyan residents’ use of, or investment in, cryptocurrencies is growing. For example, the peer-to-peer crypto exchange Paxful recently revealed that its users from the country had digital assets valued at $125 million during the first half of 2022.
Similarly, the Central Bank earlier this year announced plans to explore the market for the viability and potential launch of a digital Kenya Shilling, a Central Bank digital currency (CBDC) similar to the eNaira in Nigeria. Those plans haven’t been formally shut down.
No problems being solved
However, in a video recently uploaded to Youtube, Njoroge still questions the benefits of cryptocurrencies for the Kenyan economy. He said:
“In our economy, what problem are they resolving?” Njoroge continues questioning, “Are they better vehicles for, let’s say payments, transactions? And the answer is no. Are they better in terms of …. security more than a bank account? And the answer is no.”
Further, in his attempts to dissuade lawmakers from entertaining individuals hyping bitcoin and other cryptocurrencies, Njoroge claimed he is also being pressured.
“I do know you are under a lot of pressure from some of these people that are pushing these things. Because for them it is good. I can assure you I have a lot of people that are pushing to put our reserves in bitcoin.”
Njoroge, however, suggested that he would have to be out of his mind before he agreed to this call to convert reserves to bitcoin.