The prospect of a Central Bank Digital Currency (CBDC) for Kenya might not be an immediate concern, according to the country's central bank.
The final decision regarding the issuance of a digital shilling is still up in the air following a series of responses to a recently issued discussion paper.
Kenya's central bank disclosed, in an announcement made on Twitter on June 2nd, that it received a variety of feedback on the potential introduction of a CBDC.
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The bank gathered over 100 comments from respondents, including the public, commercial banks, and tech firms across nine countries.
These responses were mixed, with varying opinions about the benefits and risks associated with digital shilling. The bank's statement clarified:
Implementation of a CBDC in Kenya may not be a compelling priority in the short to medium term.
Interestingly, it was highlighted that the current issues in Kenya's payment ecosystem could be effectively addressed using innovative solutions, negating the need for a CBDC in the immediate future.
This follows the bank's release of a discussion paper in February 2022. The central bank shared it has been actively discussing the matter with other central banks and engaging with proofs-of-concept for CBDCs.
Kenya has seen substantial growth in the adoption of cryptocurrencies and blockchain technology in recent years, being one of Africa's largest economies in terms of gross domestic product. Popular peer-to-peer platform Paxful is well-accepted among the country's crypto community. Two months ago, Paxful ceased all operations, citing "key staff departures" and "regulatory challenges." However, at the beginning of May, it relaunched its operations.
The Central Bank of Kenya appears to be taking a balanced approach to the CBDC introduction, continually assessing its relevance and necessity. The final verdict on the digital shilling is yet to be made, and the central bank remains committed to tracking global developments before making a conclusive decision.