The CBK (Central Bank of Kenya) is pursuing feedback on the behalf of the common masses regarding the utilization of a likely CBDC (central bank digital currency), as per a press release of Friday. A discussion paper has been issued by the CBK sketching the likely forms of digital shilling of Kenya along with the potential hazards and feasibility linked with it. The respective document additionally evaluates the rest of the payment types like electronic money as well as stablecoins.
It noted that the currently significant fame is being enjoyed by the CBDCs as compared to the past. Nonetheless, a thing of core importance is that notwithstanding the traction, the reasons behind the issuance of the CBDCs differ from country to country, as is the case with the technical designs as well as the policy approaches.
The bank stated that the potential advantages of a CBDC are not clear and some extra research is needed to particularly know about them as well as the capability of the domestic markets within the country in advance of the launch of a nation-wide digital currency.
In its words, the balance between the benefits as well as the hazards linked to CBDCs again vary from economy to economy. In 2021, while talking about the public feedback, Patrick Njoroge (the bank’s governor) echoed the stance of CBK regarding crypto, mentioning that Bitcoin as well as the other such crypto assets are unregulated with having no legal status.
The bank persuaded the citizens of Kenya to quit from transacting through the burgeoning asset class. The bank moved on to call on the public to do comment on the implementation of CBDC across Kenya to have a comprehensive and wide-ranging assessment of the country’s potential in the respective matter. The respective feedback will be taken till May this year. To have specified reflection, the bank has mentioned some CBDC-related questions to which the public will answer.
At present, the position of Kenya is 5th within the Global Crypto Adoption Index of 2021, as reported by Chainalysis research. In the meantime, nearly 87 nations (symbolizing more than 90% of the GDP across the globe) are in the phase of exploring CBDCs. Nine of the other countries have introduced their autonomous CBDC versions. Nigeria is considered to be the latest nation to issue the digital naira thereof.
James Thompson