The country’s Central Bank cites reduction, interoperability and enhanced cross-border payments as the main drivers for the digital currency’s adoption.
Kenya is considering the adoption of digital currency with its Central Bank already calling on the public to weigh in on the proposal.
The Central Bank of Kenya released a document on Thursday for public discussion, citing reduction, interoperability and enhanced cross-border payments as the main drivers for the digital currency’s adoption. These discussions are to hold before May 20.
“The trend in Kenya’s domestic payments indicates the existence of a digital currency (e-money) that is robust, inclusive and highly active. Therefore, the consideration to introduce a CBDC in the payments system in Kenya would not majorly focus on enhancing access to financial services given the existing and growing penetration of mobile money,” the bank said.
The document added that mobile money (e-money), which had kicked off in 2007, had already helped the country to enhance access to financial services.
The International Monetary Fund, in a paper released on Thursday as well, highlighted the potential risks of the digital currency.
“Adverse macroeconomic implications, such as increased currency substitution and vulnerability to financial shocks, are possible as retail CBDC becomes available across borders,” the document said.
Kenya’s actions come a day after Zambia revealed that its central bank has been carrying out research on digital currency.
Nigeria became the first country in Africa to launch its central bank digital currency (CBDC), the eNaira, in October last year and Ghana is said to be at an advanced stage of launching its e-cedi. The CBDCs, unlike cryptocurrencies like Bitcoin and Ethereum, are developed by the central banks and are backed by the countries’ fiat currencies.
