The Kenyan central bank has said implementing a central bank digital currency (CBDC) may not be a priority for Kenya in the short to medium term. According to the central bank, Kenya’s “pain points in payments can potentially be solved by strengthening innovations around the existing payment ecosystem.”
Central Bank Will ‘Continue to Monitor’ Need for a CBDC
According to the Central Bank of Kenya (CBK), the allure of central bank digital currencies (CBDC) is fading and the implementation of such “may not be a priority in Kenya in the short to medium term.” However, in its recently published discussion paper on CBDCs, the bank said it will “continue to monitor developments” globally and “periodically assess the need for CBDC in Kenya.”
Press Release – Issuance of Discussion Paper on Central Bank Digital Currency: Comments from the Public pic.twitter.com/dMlrUj2eD6
— Central Bank of Kenya (@CBKKenya) June 2, 2023
As reported by Bitcoin.com News in Feb. 2022, the CBK initially unveiled a document that assessed the benefits and risks posed by a CBDC to the Kenyan economy. At the time, the CBK cited concerns that a CBDC could potentially threaten the stability of Kenya’s financial system. The bank nevertheless said it still wanted to learn and understand Kenyan residents’ views on the matter.
However, in the document titled “Discussion Paper on Central Bank Digital Currency: Comments from the Public,” the Kenyan central bank repeated its belief that a CBDC will not bring with it many of the touted benefits. Instead, the CBK insisted that existing innovations already offer some of the touted benefits of a CBDC.
“Ultimately, the rollout of CBDC should not be a race to be first. CBK’s vision is for a payments system that is secure, efficient, and widely available to and works for Kenyans. Presently, Kenya’s pain points in payments can potentially be solved by strengthening innovations around the existing payment ecosystem,” the CBK explained in the document.
Meanwhile, the CBK revealed in the document that it is working closely with central banks that issued CBDCs “to understand if the expected benefits have been realised.” The bank also spoke of how the public’s comments have “been influential in internal and external consultations with other central banks.”
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