CBK prepares for adoption of digital currency in Kenya

CBK had in the past dismissed the possible adoption of digital currencies

CBK Governor Patrick Njoroge

The Central Bank of Kenya (CBK) has kicked off a discussion on the possibility of the use of digital currency in the country.

In a statement on Thursday February 10, CBK announced the issuance of a discussion paper on Central Bank Digital Currency for public comments.

CBK is looking to create public participation on the applicability of a potential Central Bank Digital Currency (CBDC) in Kenya.

It is part of CBK's initiatives to ensure informed policy decisions regarding innovations. The Discussion Paper invites comments from the public to be considered when assessing the potential use case for CBDC in Kenya," the bank said.

CBK acknowledged that technological innovations and developments were accelerating at a very fast pace.

New digital payment methods have emerged to facilitate transactions, including CBDC, issued by central banks to serve as money in a digital form.

Naturally, the balance of risks and benefits of CBDCs will vary from one economy to another,” the statement added.

CBK has been closely monitoring the development of digital currencies globally.

The bank has prepared a Discussion Paper which outlines the evolution of payments globally and in Kenya. The paper discusses recent digital payment methods including electronic money, CBDC, stable coins and other cryptocurrencies.

It (Discussion Paper) outlines Kenya's payment landscape and assesses the potential applicability of CBDC. Further, it highlights the potential opportunities and risks presented by CBDC.

To comprehensively evaluate the potential applicability of CBDC in Kenya, CBK requests for public comments on a number of questions,” CBK explained.

Kenya is one of the top three markets for bitcoin, one of the more popular cryptocurrencies.

CBK had in the past dismissed the possible adoption of digital currencies, describing them as unregulated and volatile.

''Transaction in virtual currencies such as Bitcoin are largely untraceable and anonymous, making them susceptible to use by criminals in money laundering and terror financing,'' CBK said in a past statement.

Ghana’s central bank has also kicked off conversations about the adoption of digital currency.

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