Kenya’s Central Bank Deems Digital Currency as Non-Urgent Matter of Priority. The Central Bank of Kenya stated on Friday that issuing a Central Bank Digital Currency is not currently a “compelling priority.” The bank does not prioritise the introduction of a digital currency at this time.
Instead, the bank will continue to monitor developments in the area to inform future decisions. Following its invitation for public input on the potential introduction of a central bank digital currency (CBDC) last year, this decision has been made.
Staying Informed: Adapting to Emerging Trends in Central Bank Digital Currency
The purpose of monitoring is to gather information that will inform future decisions regarding the issuance of a CBDC. With a vigilant stance, the bank seeks to remain informed about the evolving digital currency landscape.
Consequently, this approach allows them to make informed choices and decisions in the future.
By staying updated, the bank can adapt to emerging trends and developments in the digital currency space. The bank’s stance represents a change from its previous opposition to crypto assets.
Commitment to Monitoring: Informing Future Decisions on Central Bank Digital Currency
Acknowledging the previous allure of CBDCs, the bank emphasised that their appeal has diminished. This observation reflects a shift in the perception of CBDCs on a global scale.
Further, the bank recognised the changing dynamics and adjusted its stance accordingly. It stated that implementing a CBDC in Kenya may not be a pressing priority in the short to medium term.
Central banks that hurriedly launched their own digital currencies are currently facing numerous challenges. These challenges pose obstacles to the successful implementation of these digital currencies.
The rush to issue digital currencies has resulted in complications and difficulties for these central banks. As a consequence, they are now working to overcome these obstacles and find viable solutions. The bank also noted the emergence of additional concerns and the need for a cautious evaluation of the associated innovation and technology risks.
Kenya’s Focus on Leveraging Existing Technologies for Payment Solutions
In addressing payment-related issues, Kenya’s central bank expressed its intention to leverage existing technologies. Moreover, the country has gained international recognition for its widespread use of mobile money payments.
Specifically, Safaricom’s M-Pesa platform, launched in 2007, has evolved from a simple money transfer service to a comprehensive financial services provider. This platform offers a range of services, including payments, savings, insurance, and micro-loans.
Exploring the Potential of CBDCs for Kenya’s Financial System
Further, with over 30 million active users in a population of nearly 48 million, M-Pesa has played a significant role in transforming the digital financial landscape in Kenya.
However, while Nigeria became the first African nation to launch a digital currency in 2021, Kenya’s central bank has opted to maintain a cautious stance. The bank aims to closely observe the evolving landscape before making any firm decisions regarding the introduction of a central bank digital currency (CBDC).