Kenya Seeks Public Opinion on Potential CBDC

Applicability of a digital Kenyan shilling is being weighed up by the country’s central bank, which is requesting public feedback

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  • Kenya’s central bank is requesting public feedback on the applicability of a potential digital Kenyan shilling
  • The bank said CBDCs were receiving “more attention than ever before”

The Central Bank of Kenya (CBK) is seeking feedback from the public on the applicability of a potential central bank digital currency (CBDC), according to a press release on Friday.

CBK has issued its discussion paper outlining the possible variations of a digital Kenyan shilling as well as the feasibility and risks involved. The paper also examined other payment types including stablecoins and electronic money.

“It is quite apparent that CBDCs are receiving more attention than ever before,” the bank said in its release. “However, a key point to note is that despite the traction in attention, the motivations for the issuance of CBDCs vary across countries, as do the policy approaches and technical designs.”

It said the benefit of a Kenyan CBDC remains unclear and further research on the specific design was needed to shore up confidence in the country’s domestic markets before it would consider developing a digital form of the nation’s currency built atop blockchain tech.

“Naturally, the balance of risks and benefits of CBDCs will vary from one economy to another,” the bank said.

Consideration of public opinion follows the bank’s governor, Patrick Njoroge, last year reiterating CBK’s stance that crypto, such as bitcoin, are not legal tender and are unregulated. The bank initially urged Kenyans to “desist from transacting” via the nascent asset back in 2015.

“To comprehensively evaluate the potential applicability of CBDC in Kenya, CBK requests for public comments on a number of questions,” the bank said. It is seeking feedback no later than May 2022.

Kenya currently ranks 5th in the 2021 Global Crypto Adoption Index, according to Chainalysis research. Meanwhile, around 87 countries, representing over 90% of global GDP, are currently in the exploration phase of CBDCs.

A further nine countries have launched their own form of CBDC. Nigeria became the latest country to launch its digital naira, the first outside the Caribbean nations, according to research by Atlantic Council.


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