The Central Bank of Kenya (CBK) has released its discussion paper on the possibility of a central bank digital currency (CBDC) and is now awaiting feedback from the public on the pros and cons, as well as potential policies and regulations.
The CBK is seeking comments on the issue until May 20 via an online form.
“This discussion paper is part of CBK’s initiatives to ensure informed policy review regarding financial sector innovations,” according to the form. “CBK invites the public, industry and stakeholders to review this discussion paper on CBDC and provide feedback and ideas to be considered when assessing the use case for CBDC in Kenya.”
See also: Zambia Climbs Aboard the CBDC Train but Hits the Brakes on Crypto
Kenya is one of many countries exploring the impact of the government-backed digital currencies following the cryptocurrency frenzy that started with bitcoin and now counts more than 10,000 crypto in distribution, according to CoinMarketCap.
African countries researching CBDCs include Zambia, Rwanda, South Africa and Tanzania. There are now 87 countries exploring a CBDC, compared to May 2020, where there were just 35 countries, according to the Atlantic Council.
Nine countries have fully launched a digital currency, with Nigeria being the latest and the first outside the Caribbean.
A CBDC issued by the CBK would be a sovereign currency in an electronic form and it would appear as a liability on the CBK’s balance sheet and an asset to users holding it, according to the discussion paper.
“Any eventual decision to introduce a CBDC would involve the government, regulatory authorities, private sector and engagement with society more generally,” according to the paper. “The most valuable opportunities that encourage issuance would be where a CBDC can support CBK’s public policy objectives.”
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