"The Allure of CBDC is Fading", Says the Central Bank of Kenya

The Central Bank of Kenya said the "pain points" in the country's payments system can be addressed by innovation around the existing ecosystem, and that a central bank digital currency (CBDC) "may not be a compelling priority."

The central bank received more than one hundred of comments during a consultation period that began in February, according to an announcement posted on Twitter Friday. Respondents included representatives of commercial banks and institutions from nine countries.

Respondents highlighted some of the benefits of a central bank digital currency, such as increased efficiency, the central bank said. Risks, such as high costs and financial exclusion, were also mentioned.

The central bank said countries that have issued CBDC are facing problems that "have hampered implementation" and that recent instability in crypto markets has added to concerns. Nigeria, for example, has faced adoption issues, and the Central Bank of the Bahamas said in May it was working to improve CBDC adoption three years after launching the digital currency.

The Central Bank of Kenya said, "The allure of the CBDC is fading. The bank will continue to monitor developments in CBDCs to inform future assessments."

(Source: CoinDesk)