CBK Digital Currency: Kenya is finally appearing ready to introduce digital currencies into its financial systems. This follows a move by the Central Bank of Kenya that has seen the CBK call on Kenyans to submit their views on the introduction of a central bank digital currency (CDBC), a virtual version of the Kenyan shilling, as it seeks to keep pace with global financial innovations.
The CBK has given Kenyans 120 days to submit their views that will form part of considerations to create a CBK-backed digital currency. According to CBK, a CBDC that is issued by the CBK would be a sovereign currency in an electronic form. It would appear as a liability on CBK’s balance sheet and an asset to users holding it. “The most valuable opportunities that encourage issuance would be where a CBDC can support CBK’s public policy objectives,” the CBK said. “The trend in Kenya’s domestic payments indicate the existence of a digital currency (e-money) that is robust, inclusive and highly active.”
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Here is what the CBK said:
The Central Bank of Kenya (CBK) announces the issuance of a Discussion Paper on Central Bank Digital Currency for public comments. The Discussion Paper examines the applicability of a potential Central Bank Digital Currency (CBDC) in Kenya. It is part of CBK’s initiatives to ensure informed policy decisions regarding innovations. The Discussion Paper invites comments from the public to be considered when assessing the potential use case for CBDC in Kenya. The consideration to introduce a CBDC in the payments system in Kenya could target cost reduction, interoperability and enhancing cross border payments. Existing proposals indicate that CBDC might hold the potential to achieve much needed interoperability. Written submissions or representations should be sent to CBK by Friday, May 20, 2022 at 5.00 p.m.
