The Allure of Central Bank Digital Currencies (CBDC) is Known to the Central Bank of Kenya (CBK) but they may not be a priority in Kenya in the short to medium term. According to the CBK, Kenya’s pain points in payments can potentially be solved by strengthening innovations around the existing payment ecosystem.
What Does the CBK Say?
Kenyan Central bank will continue to monitor the need for CBDCs. Even though blockchain and cryptocurrency have been growing in Kenya, it is not yet clear whether the Central Bank of Kenya will issue a national digital currency.
In its recently published discussion paper on CBDCs, the bank said it will continue to monitor developments globally and periodically assess the need for CBDCs in Kenya.
The Kenyan central bank repeated its belief that a CBDC will not bring with it many of the touted benefits. In addition, the CBK explained, in the document titled ‘Discussion Paper on Central Bank Digital Currency: Comments from the Public,’ that existing innovations already offer some of the touted benefits of a CBDC.
The CBK and its Vision
According to the CBK, the rollout of CBDC should not be a race to be first. The CBK’s vision is for a payments system that is secure, efficient, and widely available to Kenyans. Presently, Kenya’s pain points in payments can potentially be solved by strengthening innovations around the existing payment ecosystem.
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.”