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Central Bank of Kenya confirms digital currency ambitions

Kenya , 23 Feb 2022

The Central Bank of Kenya is eager to integrate digital currencies as a means to digitise and optimise payment systems in the country.

Speaking at the launch of the Central Bank’s National Payment Strategy for 2022 to 2025, Central Bank Governor Patrick Njoroge noted the milestones in digital payments in Kenya while looking at new technologies in the future, including central bank digital currencies.

“The payment system has provided the rails for Kenya’s financial inclusion journey. Over the last 15 years access to financial services has tripled from 26 percent of adults in 2006 to 83 percent in 2021,” he said.

“Further, technological changes and innovations continue to gather pace, this has led to the emergence of new prospective payments method including digital currencies such as electronic money, cryptocurrency, stable coins and central bank digital currencies (CBDCs)."

Njoroge added that while there are advantages to using these new payment technologies, regulators must consider the risks.

“It is against this backdrop that we are launching the National Payment Strategy. It seeks to consolidate the gains we have made so far while illuminating the path towards a new chapter in Kenya’s payment journey.”

According to Njoroge, the strategy seeks to realise the vision of a secure, fast, efficient and collaborative payments system that supports financial inclusion and innovations that benefit Kenyans.

Last week’s launch on the discussion paper for Central Bank Digital Currency in Kenya stipulated the benefits of having a digital currency including easier cross-border payments and enabling interoperability in the mobile money system.

“The most valuable opportunities that encourage issuance would be where a CBDC can support CBK’s public policy objectives,” the discussion paper stated.

Kenya’s move towards CBDC adoption follows Nigeria’s recent launch of its own CBDC in 2021.

According to a 2021 survey of central banks by the Bank for International Settlements (BIS), 86% of central banks are actively researching the potential for CBDCs, 60% were experimenting with the technology and 14% were deploying pilot projects.

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