The WorldCoin cryptocurrency could have important implications on the Kenyan government’s monetary policy and control of the country, Kenya’s National Assembly has been told.
According to local reports, the assertion was made by the country’s National Computer and Cybercrimes Coordination Committee (NCCCC) Director, James Kimuyu, at an ongoing inquiry following WorldCoin’s suspension of its activities in Kenya in August 2023.
“Cryptocurrencies and blockchains could challenge the central bank’s ability to control the money supply and implement monetary policy. The decentralized nature of cryptocurrencies could impact interest rates and reserve requirements,” Kimuyu noted.
Kimuyu also noted that cryptocurrencies like WorldCoin could also pose competition to foreign exchange systems and remittance providers owing to its speedy and co-effective transaction.
Moreover, the committee stated that the WorldCoin transactions could lead to tax evasion since it can be difficult to track and tax due to their decentralized nature.
The use of biometric data and the potential competition posed by WorldCoin’s speedy and cost-effective transaction system have raised concerns within the committee. Specifically, the use of biometric data is seen as a potential threat to national security. These concerns highlight the need for thorough scrutiny and regulation of digital currency projects to ensure they comply with privacy, security, and national security standards.
“The financial and digital identity platform has inherent cybersecurity risks and vulnerabilities including cyber-attacks, hardware security, computer fraud, data breaches, and identity spoofing, exploitation amongst others,” he added.
Nonetheless, the committee said that WorldCoin is registered as a data controller in the country, giving the company permission to determine how to use the collected data in the country.
The company is still said to have breached national laws.
“We have noted obvious breaches of our data protection laws,” the committee noted, adding that Kenya cannot compel them [Worldcoin] to comply with the country’s regulatory laws as it lacks jurisdiction, considering it does not have physical offices here.
Kimuyu highlighted that WorldCoin activities could lead to rising cases of terrorism and criminal activities like money laundering and cyber security threats.
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