The Central Bank of Kenya (CBK) has given its take on Facebook’s Libra cryptocurrency project. The apex bank has said that Libra comes with phenomenal risks that need to be properly understood, reports local news source, Telecompaper on July 22, 2019.
CBK Wary of Libra
Per sources close to the matter, the Central Bank of Kenya (CBK) has joined a growing list of financial institutions that have condemned Facebook’s Libra cryptocurrency scheduled to go live next year.
More specifically, CBK Governor Patrick Njoroge has stated categorically that the risks associated with Libra are phenomenal and must be understood better before he makes a statement.
Though some financial institutions in the region have been nursing plans to integrate blockchain technology into their operations for quite some time now, Njoroge has made it clear that the CBK does not plan to approve blockchain-based cryptocurrencies as legal tender anytime soon.
Libra to Disrupt the Financial Ecosystem
It’s noteworthy that Facebook a highly controversial social media and tech giant has been making inroads into the peer-to-peer (P2P) payments industry in recent years.
In 2015, the Mark Zuckerberg-led firm launched its P2P payments service in the United States, before extending it to some parts of Europe. The solution made it possible for users in supported regions to transfer money in real-time, via the Facebook Messenger app.
The payments solution functioned until June 2019, when Facebook discontinued the service in the United Kingdom and France, citing lack of consumer interest in the product.
Determined to make its presence felt in the payments industry just as it is in the social media world, Facebook decided to join the blockchain technology bandwagon.
In June 2019, the multi-billion dollar company released the whitepaper and Calibra wallet for its Libra digital asset, which is controlled by a consortium of 27 heavyweight firms including PayPal, Square, and Mastercard to mention a few.
Since taking that bold step, the firm has attracted massive attention to itself like never before, with financial authorities across the world, including Rep.Maxine Water, asking it to place Libra on a moratorium until the risk concerns are fully addressed.
However, in a Senate hearing on July 16, 2019, David Marcus, the head of Calibra, told the Senate Banking Committee that Libra will comply with all U.S. financial regulations and will not launch until all regulatory questions have been answered.