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The Kenyan Central Bank is investigating CBDCs for the “proliferation” of private cryptocurrencies

October 26, 2020

The Central Bank of Kenya or CBK would have started discussions with international central banks to examine the possibility of entering the digital currency space issued by the central bank.

CBK Governor Dr. Patrick Njoroge told reporters during DC Fintech Week in Georgetown:

“We [el CBK] We are already having discussions with other global players in various ways about the introduction of digital currencies by the central bank. The momentum is due to the proliferation of private cryptocurrencies and we already feel left out and need to create our own space. “

From the point of view of Dr. Njoroge The central bank should be aware of the “niche” for private sector cryptocurrencies to compete for. The governor of the CBK highlighted money laundering and the financing of illegal activities as a central concern of the institution. However, he seemed less convinced that the global trend is towards a truly cashless society, and characterized developments merely as a trend towards a “less cash” environment.

The Kenyan Central Bank is investigating CBDCs for the “proliferation” of private cryptocurrencies
The Kenyan Central Bank is investigating CBDCs for the “proliferation” of private cryptocurrencies

Dr. Njoroge’s explicit reference to ongoing global research into how a CBDC could in principle be accessible to the public seemed to place the digital currency prescribed by the central bank in explicit competition with decentralized currencies.

The governor of CBK also expressed a rather derogatory opinion on Bitcoin (BTC), calling it merely a speculative tool. While he finds the coin’s underlying technology impressive, he argued that it was still an invention looking for a problem to be solved.

With cryptocurrency trading on the African continent on the rise, local industry entrepreneurs prepare with cautious optimism for the likely implementation of stronger regulation. Bitpesa, the Kenya-based Stephany Zoo, told Cointelegraph in September 2020 that While there is a risk that stubborn tampering will stifle intervention, better integration with traditional financial infrastructure could boost the crypto space equally.