CBDC ‘may not be a compelling priority,' says Kenya’s central bank

CBDC ‘may not be a compelling priority,' says Kenya’s central bank

The Central Bank of Kenya received comments on a discussion paper on the potential issuance of a digital shilling and hasn’t reached a definitive conclusion. 

In a June 2 announcement on Twitter, Kenya’s central bank said it received more than 100 comments from members of the public, commercial banks, tech firms and other participants across nine countries regarding the issuance of a central bank digital currency, or CBDC. The responses varied from highlighting potential benefits and risks, but the central bank said it would “continue to monitor developments” and take a “measured approach" to consider assessing the rollout of a digital shilling in the future.

“Implementation of a CBDC in Kenya may not be a compelling priority in the short to medium term,” said the central bank. “Significantly, Kenya’s pain points in payment could potentially continue to be addressed by other innovative solutions around the existing ecosystem.”

Press Release - Issuance of Discussion Paper on Central Bank Digital Currency: Comments from the Public pic.twitter.com/dMlrUj2eD6

— Central Bank of Kenya (@CBKKenya) June 2, 2023

The statement followed the discussion paper Kenya’s central bank released in February 2022. The bank added that it had been collaborating with other central banks behind proofs-of-concept for CBDCs but noted “the allure of CBDCs is fading" on the global stage.

Related: Kenya considers tax on crypto, NFT transfers and online influencers

As one of the largest economies in Africa by gross domestic product, Kenya has grown its adoption of crypto and blockchain significantly in the last few years. Peer-to-peer platform Paxful is widely used among crypto enthusiasts in the African nation, and there are Bitcoin mining projects helping to provide power to rural communities.

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