Kenya starts exploring CBDCs and asked the broad public to express their viewpoint on the financial products so let’s read further in today’s latest cryptocurrency news.
Kenya starts exploring CBDCs and said that they could positively impact the local financial system but the Central Bank even introduced a discussion paper to find out what the general public thinks on the matter. According to the Central Bank of Kenya, launching a central bank currency can flatten the banking structure of the company and can enhance the cross-border payments system. The latter can also become even more efficient and less expensive.
Press release: Issuance of Discussion Paper on Central Bank Digital Currency (CBDC) for Public Comments. The Discussion Paper examines the applicability of a potential Central Bank Digital Currency (CBDC) in Kenya. pic.twitter.com/8vdcQNz7cG
— Central Bank of Kenya (@CBKKenya) February 10, 2022
Despite the favorable stance on the monetary product, the central bank released a discussion paper to examine if the locals are supportive and they can analyze both threats and opportunities which a CBDC can bring with it. Those that are willing to participate have until May this year to submit their comments. Kenya’s central bank added that the CBDCs could shield society from the risks of new forms of private money by creating a safer payment system that can bring new forms of privately issued money like instruments like stablecoins. On the other hand, the institution didn’t rule out possibilities that such a financial product can present an opportunity for cyberattacks:
“The “unknowns” would impact central banks’ core functions of monetary policy, financial stability, and payment systems oversight.”
Kenya even joined a number of countries that are exploring central bank digital currencies and these include India, South Korea, China, Malaysia, and more. Zambia also announced it will complete its CBDC research by the end of 2021 which seems like a natural move since the authorities criticized private cryptos previously. A few days ago, the Managing director of the International monetary fund Kristalina Georgieva suggested that a prudently designed CBDC can be a safer product than crypto and she also described BTC and other altcoins as unbacked and volatile.
It is worth noting that the Central Bank of Kenya displayed some affection towards BTC as well and towards the end of 2020, the Institution blamed the IMF’s controversial policies for Shilling’s weakening. The Central Bank Governor Patrick Njoroge said that adopting the main cryptocurrency could shield Kenya from Forex exchange losses and can even fix some of the local financial turmoil:
“Our decision to shift to Bitcoin is both tactical and logical. Our currency has always been the punching bag for the IMF, which always claims that the Kenya Shilling is overvalued.
This has led to too much pressure on the Kenyan Shilling, and this has a negative effect on the economy. We are losing too much simply because someone at the IMF woke up on the wrong side of the bed. Bitcoin will put an end to this.”
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