The Central Bank of Kenya (CBK) has published a discussion paper on its Central Bank Digital Currency (CBDC), soliciting general input on the potential benefits and risks, as well as regulatory issues, associated with the introduction of a central bank digital currency in Kenya.
The CBK statement highlights that the use of the central bank’s digital currency can improve cross-border payments by making them more efficient and affordable. The regulator says that CDBC solutions can facilitate the scaling structure of correspondent banks and shorten payment chains in a discussion paper that explores the future use of digital currency:
“The main opportunity in which the Central Bank of Kuwait sees potential value is the use of digital central bank currencies to facilitate cross-border transactions, although the benefits are difficult to determine, digital central bank currencies can lead to efficiency gains by leveling the tiered correspondent banking structure and reducing payments .strings.”
The watchdog has given Kenyans until May 20 to provide their comments on a paper looking at the risks and opportunities of CBD, which has already been implemented in several countries around the world, including Nigeria. CBC will collect comments on the case within 100 days through an online form.
According to the Central Bank of Kuwait, clients of central banks can protect the public from the risks of new types of private money by offering more secure and reliable payment services than newly created forms of privately issued money such as stacked coins. However, he mentioned that central bank digital currencies pose a risk for cyber attacks and many security issues, including privacy concerns.
The Kenyan government has not yet decided whether to implement a CBDC. The final discussion paper is intended to start the discussion and provide a basis for further research.
Kenya has joined an exclusive group of countries that are either exploring or already beginning to develop CBD. According to the Atlantic Council, as of June 2019, 91 countries are currently searching for a premium digital currency, and only 14 of them are in the beta stage. According to the information, nine countries have implemented the CBD.
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Currently, China is the most advanced country for conducting a CBDC test, called the Digital Yuan, and the mobile app has already been downloaded more than 20 million times since January 4. According to Cointelegraph, India’s Finance Minister Nirmala Sitharaman has announced the launch of a digital rupee by 2022-2023 to boost economic development.