CBK tests market with digital Kenya shilling
Central Bank of Kenya Governor Patrick Njoroge. The CBK has invited the public to give their views on the potential introduction of a digital currency.
What you need to know:
- The Kenyan version of the Central Bank Digital Currency (CBDC), whose introduction has been under debate for the last few years, will be exchangeable on a one-to-one basis with physical cash.
- It will enable customers to bypass banks, with the CBK taking on a new role of keeping track of holdings, transactions and settlements.
- Kenyan banks have in recent years seen their profitability rise to record levels, driven by higher interest and non-interest income.
The proposed Central Bank of Kenya (CBK) digital currency will for the first time allow Kenyans to directly keep cash at the apex bank, placing it in direct competition with commercial banks for deposits.
The Kenyan version of the Central Bank Digital Currency (CBDC), whose introduction has been under debate for the last few years, will be exchangeable on a one-to-one basis with physical cash.
It will enable customers to bypass banks, with the CBK taking on a new role of keeping track of holdings, transactions and settlements.
The CBDC is being eyed mainly to ease cross-border payments and complement mobile money in the local digital payments space.
The CBK on Thursday invited the public to give their views on the potential introduction of the digital currency, in a shift from its original opposition to crypto assets.
The regulator noted, however, that having its own digital currency for retail customers could lead to a migration of deposits from commercial banks to the CBDC.
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