CBK explores possible introduction of digital currency as payment option

The Central Bank of Kenya (CBK) has announced plans that could see the introduction of digital currency into the country’s national payment system.

CBK on Thursday published a Discussion Paper inviting public input on modalities of possible introduction of Central Bank Digital Currency (CBDC) citing growing innovations which have seen emergency of new digital payment methods.

“Rapid technological innovations and developments are accelerating the pace of digitalization. New digital payment methods have emerged to facilitate transactions, including CBDC, issued by central banks to serve as money in a digital form. Naturally, the balance of risks and benefits of CBDCs will vary from one economy to another,” said CBK Governor Dr. Patrick Njoroge in a statement.

The CBDC which will be equivalent to normal physical currencies in use today is backed to help expand payment channels and support cross border transactions.

Among digital payment systems that have emerged include electronic money, CBDC, stablecoins and cryptocurrencies.

Unlike cryptocurrencies which are distributed on a public ledger, CBDCs are centralized and are issued by central banks in their own blockchain.

More to follow…