Central Bank of Kenya seeks public opinion on possibility of introducing digital currency

The Central Bank of Kenya has invited the public to comment on the possibility of introducing a digital currency, a change from its initial opposition to cryptoassets. The country pioneered the use of Safaricom’s M-Pesa for mobile payments in 2007, but the country’s central bank has yet to issue a digital currency due to risk concerns. Those risks include commercial banks being constrained by the transfer of deposits to digital currencies, and financial exclusion of those without access to technological infrastructure or knowledge, the bank said on Thursday. The bank said digital currencies could inhibit the effectiveness of monetary policy and increase money laundering risks. But the bank also said digital currencies could offer some benefits, especially in reducing the cost of cross-border payments. For digital currencies to work, all countries in the region need to participate in order to flatten the “multi-layered correspondent banking structure” and shorten payment chains, the bank said. (Reuters)