The CEO of M Oriental Bank, a 20-year old fully-licensed Kenyan bank, Mr. Alakh Kohli, has said that the bank has not plans to offer digital currency services until regulatory guidelines are in place.
Mr. Alakh was responding to a question during the monthly CEOChat session organized by the Kenya Bankers Association (KBA), the umbrella body of the financial institutions regulated by the Central Bank of Kenya (CBK).
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Responding to a question from BitKE on the bank’s position on digital currencies and how these are evolving within the Kenyan banking sector, Mr. Alakh said:
“Digital currencies is a hot topic. While digital currencies are an important tool for investors as a store of value, as banks we are governed by various laws and regulations, once the right regulatory frameworks are available we should definitely see banks being quick to offer the required services.”
– CEO, M Oriental Bank, Kenya
The CEO also highlighted the recent Central Bank of Kenya report which showed that 79% of Kenyan banks and launched new products with digital innovations in 2020 alone. This underpins the massive drive within the Kenyan banking space to adopt innovative digital services to service their clients.
When prompted about the Kenyan banks offering digital asset custody services similar to their western counterparts, Alakh said:
“At the moment we have no plans on rolling out any digital currency services in the absence of a regulatory framework.
This is an evolving space, and once the right frameworks are in place to address the risks, including Anti Money Laundering and Countering the Financing of Terrorism and underlying asset concerns for it to be a store of value, I’m sure there will be offerings coming to the market.”
– CEO, M Oriental Bank, Kenya
Despite reservations when it comes to offering crypto services, Alakh expressed excitement regarding the underlying technology by saying:
“What is more exciting is the blockchain technology which digital currencies are based on is already being adopted by banks for enhancing and offering new and disruptive product innovations.”
The above comments are a reflection of the wider banking industry in Kenya following strict regulations by CBK to all financial institutions in Kenya to avoid dealing in cryptocurrencies.
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RECOMMENDED READING: Central Bank of Kenya Cautions All Commercial Banks in Kenya against Dealing in Virtual Currencies
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