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World Bank cautions lenders on Bitcoin

Zachary Ochuodho @zachuodho

The World Bank Group has cautioned the financial sector against Bitcoin business saying it is “dangerous” to the global financial system.

World Bank Group senior vice president Mahmoud Mohieldin said at a Euromoney conference held yesterday in Nairobi, that while the system deploys fintech to provide the services, some issues regarding cryptocurrencies are overrated. ‘Innovation in fintech shapes the financial systems and is the future,” said Mohieldin.

According to him, there is need for Central Banks to have regulations to protect consumers from using Bitcoin, so as to create trust among those using their financial systems.

He said the government needs to develop a framework through which users of big data ask for permission from individuals to avert any breach.

Central Bank of Kenya deputy governor Sheila Mbijjiwe said the banking sector would not fear cryptocurrencies if they were to address risks that they pose to consumers.

M’Mbijjewe said the Ministry of Lands is currently considering using blockchain, the technology behind Bitcoin Cryptocurrency, to help digitise land information. “Blockchain is a good thing but we need to have a regulation so that users can build trust,” said M’Mbijjewe.

KCB chief executive Joshua Oigara said there is need for companies to generate big data which can be used by commercial banks to provide credit histories.

Oigara said although credit reference bureaus are in place, they do not provide adequate information about individual borrowers. “Let the fintech innovations say what benefit they are likely to provide the public,” said Oigara in reference to cryptocurrencies.

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