Central Bank of Kenya Ambivalent on Digital Currency.
The Central Bank of Kenya has stated that the problems in the country’s payment systems can be solved by innovative solutions built around the current ecosystem, and that creating a central bank digital currency (CBDC) may not be a top priority. The bank released a statement on Twitter on Friday, announcing that it had received over 100 comments on a consultation it launched in February. Respondents came from nine countries and included representatives from commercial banks and other institutions.
Respondents pointed out the benefits of a CBDC, such as increased efficiency, as well as risks, such as high implementation costs and financial exclusion. The statement also noted that countries that have issued a CBDC have faced issues that have hindered implementation, and that instability in the cryptocurrency market has amplified these concerns. Nigeria, for example, has struggled with adoption, while the Bahamas central bank is still working on a strategy to improve CBDC adoption, three years after its launch.
The cryptocurrency market experienced significant losses last year during the so-called “crypto winter,” and market turbulence was worsened by the collapse of stablecoin issuer Terra and crypto exchange FTX.
The Central Bank of Kenya stated that “the allure of the CBDC is fading,” and that it will continue to monitor developments in CBDCs for future assessments.
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Read more: Some Central Banks Reportedly Looking to Issue a CBDC Within 10 Years
Edited by Sheldon Reback.
