In a statement on Thursday, February 10, the CBK announced the release of a central bank digital currency working paper for public comment.

The CBK is seeking to engage the public on the applicability of a possible Central Bank Digital Currency (CBDC) in Kenya.

“This is part of CBK’s initiatives to ensure informed policy decisions regarding innovations. The discussion paper invites public comments to be considered when evaluating the potential use case of CBDC in Kenya” said the bank.

CBK recognized that innovations and technological developments are accelerating at a very rapid pace.

“New digital payment methods have emerged to facilitate transactions, including CBDCs, issued by central banks to serve as currency in digital form.

“Naturally, the balance of risks and benefits of CBDCs will vary from economy to economy,“, adds the press release.

The CBK closely monitors the development of digital currencies around the world.

The bank has prepared a discussion paper that outlines the evolution of payments globally and in Kenya. The paper discusses recent digital payment methods including e-money, CBDC, stablecoins, and other cryptocurrencies.

“It (discussion paper) describes the payments landscape in Kenya and assesses the potential applicability of the CBDC. Additionally, it highlights the potential opportunities and risks presented by the CBDC.

“To comprehensively assess the CBDC’s potential applicability in Kenya, CBK is seeking public comment on a number of issues,“, explained CBK.

The CBK had in the past rejected the possible adoption of digital currencies, describing them as unregulated and volatile.

”Transactions in virtual currencies such as Bitcoin are largely untraceable and anonymous, making them susceptible to use by criminals in money laundering and terrorist financing.” CBK said in a past statement.