The Kenyan and Nigerian central bankers consider cryptocurrencies to be highly volatile. Consequently, they consider the acceptance of cryptocurrencies as a means of payment a high risk. According to a Reuters report, the central bankers of both countries believe cryptocurrencies pose a risk to financial stability.
The deputy governor of the Central Bank of Nigeria, Kingsley Obiora, and Patrick Njoroge, the governor of the Central Bank of Kenya, are in support of the Central Bank Digital Currency (CBDC). They believe that CBDC has the potential to narrow down the financial exclusion gap. Moreover, they added that only CBDC could reduce the transaction cost and is a reliable currency in contrast to other cryptocurrencies.
International Monetary Fund (IMF) moderated a virtual summit whereby Obiora explained his stance against cryptocurrencies. He stated that cryptocurrencies are volatile, creating instability in the financial system.
Kenya to Issue a CBDC
The governor of the Kenyan central bank has hinted that the Central Bank of Kenya may eventually regulate crypto assets as ‘wealth products.’ The governor believes that Kenya, like Nigeria, will soon follow suit and issue its own CBDC while regulating other cryptocurrencies.
However, Njoroge also explained that there would be certain differences between the approach of the Nigerian central bank and the Kenyan central bank. He added that unlike the Central Bank of Nigeria, which is pursuing to increase the people that are financially included through the CBDC it launched, the Kenyan central bank would not be doing this because that has already been achieved through mobile money.
The Kenyan central bank is taking into account the wishes of the general public as well. It had sought public perceptions and views on Central Bank Digital Currency. The central bank is now examining the public’s feedback and will act accordingly.