CBK halts rollout of digital currency
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CBK halts rollout of digital currency alluding to still several risks the technological advancement faced
CBK halts rollout of digital currency alluding to still several risks the technological advancement faced.
On Friday, June 2, the Central Bank of Kenya (CBK) declared that it will not continue with the short- and medium-term implementation of digital currency.
CBK stated in a statement that the choice was made after gathering Kenyans’ opinions and taking other global considerations into account.
Citing other nations that had embraced the new payment mechanism, CBK elaborated on the challenges that the technological innovation still faced.
High implementation costs, cyber security threats, and financial exclusion were some of the risks mentioned by the respondents who shared their opinions with CBK.
“Central banks that were first to roll out Central Bank Digital Currencies (CBDCs) have recently faced challenges that have hampered implementation.
Additionally, recent instability in the global crypto assets market has amplified concerns and the need to review innovation and technology risks carefully.
“Against this backdrop, implementation of a CBDC in Kenya may not be a compelling priority in the short to medium term,” read the statement in part.
Nonetheless, despite the decision, CBK maintained that it did not rule out the rollout of the currency in the future.
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It was also revealed that studies being done in the industry by leading global players would help shape the currency’s adoption in the future.
“Major global central banks have deferred the decision on adopting CBDCs. This measured approach is consistent with the approach that CBK is taking.
“CBK has also been collaborating with other central banks that have developed a proof of concepts for CBDCs, to benefit from their experience,” CBK detailed.
The statement also noted that several Kenyans and players in the sector had expressed optimism over the move to roll out the digital currency citing advantages such as increased efficiency and transparency in the banking sector.
CBK called on Kenyans and other players in the sector to give their views on the planned rollout of the currency on February 10.
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