Kenya is exploring the use of central bank digital currency (CBDC) to settle cross-border payments according to the country’s Central Bank Governor Dr Patrick Njoroge.
A Central bank digital currency (CBDC) is money that exists solely in electronic form, issued and regulated by the nation’s monetary authority and backed by the government.
Speaking on the sidelines of the Afro-Asia Fintech festival which was held virtually, Dr Patrick Njoroge said that (CBDCs) can slash the time needed for cross border payments in addition to cutting costs significantly. Njoroge confirmed the bank has plans for a central bank digital currency (CBDC) arguing that CBDCs can enhance the efficiency of cross-border payments, as long as countries work together.
“We see the benefits would be more cross border…” said CBK Governor adding that, “The issue is not to be first, the issue is to do it right”
Dr Njoroge further confirmed that the Central Bank of Kenya (CBK) is in discussions with other global Central Banks on the possibilities of introducing the CBDCs.
Nigeria’s Central Bank Digital Currency
This comes after President Muhammadu Buhari unveiled the Nigerian Central Bank Digital Currency (CBDC), known as the eNaira, on Monday 25 October 2021, at the State House, Abuja.
Central bank-backed CBDCs and cryptocurrency are both virtual money, however, CBDCs are issued and regulated by the central bank while cryptocurrencies are out of government control.
The launch of the eNaira is a combination of several years of research work by the Central Bank of Nigeria in advancing the boundaries of the payments system in order to make financial transactions easier and seamless for every part of society
According to media reports, the eNaira saw over 400,000 new wallets registered with 12,500 transactions worth $113,000 in less than two weeks of launch.