The Apex Bank of Kenya said “pain points” in the country’s payments systems can be addressed by innovations structured around the existing ecosystem and that a central bank digital currency (CBDC) “may not be a compelling priority.”
During a recent report, the central bank said it received 100 comments on the previous consultant embarked on consultan . Respondents came from nine countries and included representatives from commercial banks and institutions.
Respondents highlighted some Pros of CBDC such as increased efficiency, and also risks including high implementation costs and financial exclusion, it said.
Countries that had issued a CBDC, which is a digital token issued by a central bank, have faced issues “that have hampered implementation” and that the recent instability in the crypto market has amplified concerns. Nigeria, for instance, has faced issues with adoption while the Bahamas central bank said in May it was working on a strategy to improve CBDC adoption, three years after its launch.
However billions were removed from the crypto market last year during the so-called crypto winter and the market turbulence was aggravated by the collapse of stablecoin issuer Terra and crypto exchange FTX.
“The allure of the CBDC is fading,” the Central Bank of Kenya said in its press statement. “The bank will continue to monitor developments in CBDCs to inform future assessments.”