Kenya central bank says digital currency not a ‘compelling priority’

Kenya’s central bank does not consider the issuance of a digital currency a “compelling priority” but it will continue monitoring developments in the area to help future decisions on issuance, it said on Friday.

The bank invited views from the public on the potential introduction of a central bank digital currency (CBDC) in February 2022, in a shift from its original opposition to crypto assets, but it has decided not to issue any.

“On the global stage, the allure of CBDCs is fading,” the bank said in a statement. “Implementation of a CBDC in Kenya may not be a compelling priority in the short to medium term.”

Central banks that had rushed to issue the currencies were now facing challenges that are hampering implementation, it said, adding that other problems have also arisen.

“Recent instability in the global crypto assets market has amplified concerns and the need for a careful review of the innovation and technology risks,” the bank said.

Kenya could lean on existing technologies to address any problems in payments, it added.

The East African nation is renowned for the wide usage of mobile money payments.

Safaricom’s M-Pesa platform, which was launched in 2007 and dominates mobile payments, has developed from a money transfer service to a full-fledged financial services provider of payments, savings, insurance and micro-loans. The platform has more than 30 million active users in a population of almost 48 million.

Nigeria became the first African country to launch a digital currency in 2021.