Kenya Explores CBDC by Starting a Public Discussion

According to the Central Bank of Kenya (CBK), a CBDC could have a positive impact on the local financial system. The institution presented a discussion paper to get the public’s opinion.

Seeking the opinion of society

The CBK believes that launching a central bank’s digital currency would flatten the multi-layered correspondent banking system and increase cross-border payments. According to the CBK, this will make cross-border payments more efficient and cheaper.

The central bank issued a discussion paper, despite its positive stance on such an monetary product. They will be able analyze the potential threats and opportunities that a CBDC may present. Participants can submit comments until May 20, 2022.

Press release: Public comments are invited on the Discussion Paper on Central Bank Digital Currency (CBDC). The Discussion Paper discusses the possibility of a Central Bank Digital Currency (CBDC), in Kenya. pic.twitter.com/8vdcQNz7cG

— Central Bank of Kenya (@CBKKenya) February 10, 2022

The central bank of Kenya stated that a CBDC could protect society from the “risk of new forms private money by providing safer payment services than new forms privately issued money-like instruments such as stablecoins.” However, it did not rule out the possibility of cyberattacks.

“The “unknowns”, would have an impact on central banks’ core functions, namely monetary policy, financial stability and payment system oversight.

Kenya joined a group of countries already exploring digital currencies from central banks. These include China, India and South Korea.

An African nation, Zambia, announced earlier this week that it would complete its CBDC research by 2021. Since the local authorities have previously criticized private cryptocurrency, this seems like a natural decision.

CBDCs could be a better option than crypto.

Kristalina Georgieva, the International Monetary Fund’s Managing Director (IMF), suggested that a CBDC designed prudently could be a safer monetary product than cryptocurrency. She called bitcoin and altcoins “unbacked and volatile”, while digital forms of national currencies could be completely controlled by governments or institutions.

It is important to note, however, that the Central Bank of Kenya had shown some affection for BTC in the past. The institution blamed the IMF for the Shilling’s weakness towards the end 2020.

Patrick Njoroge, Central Bank Governor, stated that Kenya could be protected from Forex losses by adopting the primary cryptocurrency and could help to alleviate some of the financial crisis in the country.

“Our decision to switch to Bitcoin is both tactically and logical. Our currency has been the punching bag of the IMF, who always claimed that the Kenya Shilling was overvalued.

This has caused too much pressure on Kenya’s Shilling and has had a negative impact on the economy. Because someone at IMF was wrong, we are losing too much. This will be ended by Bitcoin.

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Marla Brooks

Marla Brooks – Financial Analysis My name is Marla Brooks, and I am the mainstream behind the”observednews.com”  for the powerful and most delicate insights into the latest activities in the financial analysis category. I started my journey as an independent financial consultant. I had approximately nine years of experience in this field. I am free soul so; my passion for exploring the world has taken me to the nations across the globe and given me the chance to report for a portion of the best news associations. Currently, I am a full-time editor as experienced in finance and started to use my abilities.

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