Sebastian Sinclair

<div id="highlights-block_6205fbaa84437" class="highlights">
 <ul>
 <li>Kenya&#8217;s central bank is requesting public feedback on the applicability of a potential digital Kenyan shilling</li>
 <li>The bank said CBDCs were receiving &#8220;more attention than ever before&#8221;</li>
 </ul>
 
</div>



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 <a href="https://www.centralbank.go.ke/uploads/press_releases/1985544394_Press%20Release%20-%20Issuance%20of%20Discussion%20Paper%20on%20on%20Central%20Bank%20Digital%20Currency%20for%20Public%20Comments.pdf" target="_blank" rel="noreferrer noopener">press release</a> on Friday.



CBK has issued its <a href="https://www.centralbank.go.ke/uploads/discussion_papers/CentralBankDigitalCurrency.pdf" target="_blank" rel="noreferrer noopener">discussion paper</a> 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.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">&#8220;It is quite apparent that CBDCs are receiving more attention than ever before,&#8221; the bank said in its release. &#8220;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.&#8221;</blockquote>



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&#8217;s domestic markets before it would consider developing a digital form of the nation&#8217;s currency built atop blockchain tech.



&#8220;Naturally, the balance of risks and benefits of CBDCs will vary from one economy to another,&#8221; the bank said.



Consideration of public opinion follows the bank&#8217;s governor, Patrick Njoroge, last year reiterating <a href="https://www.centralbank.go.ke/images/docs/media/Public_Notice_on_virtual_currencies_such_as_Bitcoin.pdf" target="_blank" rel="noreferrer noopener">CBK&#8217;s stance</a> that crypto, such as bitcoin, are not legal tender and are unregulated. The bank initially urged Kenyans to &#8220;desist from transacting&#8221; via the nascent asset back in 2015.



&#8220;To comprehensively evaluate the potential applicability of CBDC in Kenya, CBK requests for public comments on a number of questions,&#8221; the bank said. It is seeking feedback no later than May 2022.



Kenya currently ranks 5th in the 2021 <a href="https://blog.chainalysis.com/reports/2021-global-crypto-adoption-index/" target="_blank" rel="noreferrer noopener">Global Crypto Adoption Index</a>, according to Chainalysis research. Meanwhile, around 87 countries, representing&nbsp;over 90%&nbsp;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 <a href="https://www.atlanticcouncil.org/cbdctracker/" target="_blank" rel="noreferrer noopener">Atlantic Council</a>.



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