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.

Mag­a­zine: Bit­coin in Sene­gal: Why is this African coun­try using BTC?