The Central Bank of Kenya is pondering getting into the deep waters of digital currency after slowing for some time
The country’s monetary authority is inviting comments from the public, through a discussion paper, views that it says will be considered when evaluating the possible use of Central Bank Digital Currency(CBDC) in Kenya.
Written submissions or representations may be delivered to the Director, Bank Supervision, P.O. Box 60000-00200, Nairobi; hand-delivered to the Central Bank of Kenya Headquarters, Haile Selassie Avenue, Nairobi; or emailed to fin@centralbank.go.ke; to be received not later than Friday, May 20, 2022 at 5.00 p.m
Whereas the Central Bank of Kenya has been pussyfooting on the matter of launching its own digital currency, the neighbouring Tanzania is already on the launch pad to have its own CBDC. The Bank of Tanzania with the full support from pro-crypto President Samia Suluhu, has already made some progress regarding the CBDC.
Consequently, the CBK has prepared a Discussion Paper that summarizes the evolution of payments globally and in Kenya. It also discusses recent digital payment methods including electronic money, CBDC, stable coins and other cryptocurrencies.
The paper outlines Kenya’s payment landscape and evaluates the possible applicability of CBDC. It further highlights the potential opportunities and risks presented by CBDC.
To comprehensively assess the potential applicability of CBDC in Kenya, the CBK requests for public comments on several several the Bank in a statement.
CBK Has Published a Discussion Paper on Crypto Cash
Fundamentally, given the wide-ranging importance of CBDC to the broader economy, any eventual decision to introduce a CBDC would involve the government, regulatory authorities, private sector, and engagement with the nation generally.
The Central Bank of Kenya, therefore, welcomes comments on this discussion paper.
Kenya is getting into the digital currency space at a time when unexpected technological innovation is ushering in a new era of public and private digital money.
The evolution to digital payments has often been stimulated by the proliferation and easy access to mobile devices, as well as the emergence of Fintech firms that constantly innovate new products to run on these devices.
New digital currencies have arisen to promote payment transactions. They include: Electronic Money (e-Moey), Cryptocurrency, Stable Coin, and Central Bank Digital Currency (CBDC).
CBDC is a digital currency issued by the central bank and planned to serve as legal tender.
A CBDC issued by CBK would be a sovereign currency in an electronic form and it would appear as a liability on CBK’s balance sheet and an asset to users holding it.
The most important opportunities that encourage disbursement would be where a CBDC can support CBK’s public policy objectives.
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