Following a period of feedback collection on central bank digital currencies (CBDCs) earlier this year, Kenya’s central bank (CBK) has told the public that a CBDC is not a priority.
Additionally, the CBK has expressed the view that the appeal of CBDCs is diminishing on the global stage.
A possible solution in the existing ecosystem
In a press release dated June 2, the central bank of Kenya (CBK) highlights that central banks that rolled out CBDC projects were quick to face challenges that impacted their implementation. The CBK also highlights recent instability for global assets being a reason for concern.
The CBK goes on to conclude that evaluating these alternative solutions to digital currencies “would be consistent with CBK’s vision for a payments system that is secure, fast, efficient, accessible to and works for Kenyans.”
In a report released last year by the United Nations Conference on Trade and Development (UNCTAD) shared that Kenya was leading the African continent in terms of cryptocurrency ownership among its population, despite ongoing turbulence in the crypto market.
The report revealed that approximately 8.5% of Kenya’s population, equivalent to 4.25 million individuals, own cryptocurrencies, positioning the country ahead of developed economies like the United States, which ranks sixth with 8.3% of its population holding digital currencies.
CBDC development programs number 114 globally
The press release does not state that the CBK is completely closed off to CBDCs although the central bank did comment that other central banks are not developing CBDCs at the moment.
“Major global banks have deferred the decision on the adoption of CBDCs…consistent with the approach the CBK is taking.”CBK via press release.
However, although the market has faced some ambiguity, the central bank digital currency (CBDC) tracker, a resource showcasing the global progress of CBDCs, has recently expanded to include 114 countries, which is triple the number of countries featured since its inception in 2020.
This suggests that while the U.S. may be at a standstill, there may still be growing interest in CBDC development worldwide.