Regulation of digital currencies in Kenya: an analysis on the recognition of cryptocurrencies
Cryptocurrency is a representation of value 1 that exists on a digital platform and is transmitted through computer systems. It can serve the traditional uses of money. That is, it can be used as a means of exchange. It can also serve as an accounting unit and a store of value 2 . The distinction here is that, unlike traditional currency, it does not have the status of being legal tender in any territory 3 . Despite this, it can serve the traditional purposes of money because it has acceptance within the digital community 4 . Just like traditional currency, there are many kinds of digital currency. Some of these are bitcoin, ethereum, amongst others.
Gains in the technological sphere have caused computer systems to become a tool in doing business. What digital currencies do is that they displace traditional institutions like central banks and commercial banks from the payment process. 22 These systems make transactions, as well as transfer money across jurisdictions. These functions directly displace central banks, commercial banks, and remittance businesses, respectively. 23 As it stands, regulations in the payment process are imperceptible to these trends 24 .