Kenya has started to explore the possibility of using CBDC

The bank sees potential value in using digital currency to facilitate cross-border transactions

11.02.2022 - 13:05

165

1 min

What’s new? Kenya joins a growing list of countries that are exploring the possibilities of using the nation’s digital currency. The Central Bank of Kenya (CBK) has stated that the use of a CBDC can improve cross-border payments by making them more efficient and less costly.

Information on the CBK website

What does the CBK propose? In a paper discussing the potential use of digital currency, the financial regulator stated that it will be able to align the multi-layered correspondent banking structure and reduce payment chains. The CBK has given citizens until May 20 to submit their comments to the document. It analyzes both the risks and prospects of a CBDC. A key opportunity in which the bank sees potential value is the use of digital currency to facilitate cross-border transactions.

What risks does the bank see? According to the CBK, the digital currency has the potential to insulate the public from the risk of new forms of private money by providing safer and more secure payment services. However, it noted that a CBDC is still vulnerable to cyber-attacks and other security threats, including data privacy issues.

Author: