Kenya’s top financial regulator released its “Annual Banking Industry Oversight Report 2022,” which says central bank digital currencies have become increasingly popular in recent years across.
The reason: users want to make fast payments with low commissions. They are also attracted by the decentralization of finances and privacy.
However, the Central Bank of Kenya believes that the country does not need to launch the digital Kenyan shilling right now.
Regulator says payment shortcomings can be solved by innovations in existing payment system. So implementing CBDC should not be a priority.
At the same time many citizens of the country have a great interest in cryptoassets, trying to make money from their high volatility.
Therefore, the Central Bank of Kenya decided to warn locals that digital assets carry various risks, including hacking and the use of crypto-assets for illegal purposes.
Bank of Kenya observes other central banks’ attitudes toward bitcoin and cryptoassets in general.
Now the Central Bank of Kenya is not ready to work out the regulation of the crypto industry, but its approach will be based on three principles:
protecting the interests of users, what economic value it can give to the state itself, and finding a balance between the risks and opportunities of cryptocurrencies.
In 2020 and 2021, Kenya ranked first in the world for peer-to-peer transactions, and last year ranked 19th among countries where citizens actively use cryptocurrencies.
However, the Central Bank of Kenya said a new survey should be conducted to find out its level of involvement in the crypto-sector of the economy.
Based on this data, the central bank and other regulators will be able to formulate a clearer regulatory policy for the industry;
Recall that the Kenyan government recently proposed an additional 3% tax on the transfer of digital assets, which caused a mixed reaction from the local cryptocurrency community.