Kenya is in no Hurry to Adopt Cryptocurrency – CBK

As risks increase globally, Kenya is not “in a hurry” to implement cryptocurrency payments, according to the Central Bank of Kenya (CBK).

The adoption of a Central Bank Digital Currency (CBDC) and the licensing of the official use of other cryptocurrencies in East Africa, according to the apex bank, is not now a priority for Kenya.

“The rollout of CBDC should not be a race to be first. Presently, Kenya’s pain points in payments can potentially be solved by strengthening innovations around the existing ecosystem,” the apex bank said in its Banking Sector.

On Monday night, the Supervision Report 2022 was released.

CBK declared that it will keep an eye on changes in the CBDC market and periodically evaluate Kenya’s demand for the payment option.

Because of the market’s severe volatility and the recent failure of stablecoins and crypto exchanges, which has hindered adoption, CBK claims that crypto assets are at a critical juncture globally.

According to CBK, the global crypto industry winter began in 2022 as a result of events that caused the market capitalization and value of crypto assets to decline by more than half since 2021.

“This volatility has led to investor caution and reduced interest in crypto assets. More importantly, it has highlighted key liquidity issues faced by cryptocurrency firms, exacerbated by poor governance frameworks,” said the CBK.

It was highlighted that the speed of transactions, cheap transaction costs, anonymity, promise of huge profits, and lack of taxation processes have all contributed to the expansion of the cryptocurrency business.

Nigeria in the continent launched a digital version of the Naira in November 2021 in response to worries that the banking system was in danger due to the increased popularity of cryptocurrencies.

Kenya was anticipated to do the same.