The Central Bank of Kenya (CBK) has invited Kenyans to give their views on the planned rollout of a digital shilling in May.
The CBK, which has maintained that it is against the use of cryptocurrency, says it is considering the adoption of digital shilling in response to the changing world.
According to the CBK, the digital shilling will be “a sovereign currency in an electronic form and it would appear as a liability on CBK’s balance sheet and an asset to users holding it.”
The digital currency will be known as CBDC and will be a national fiat currency in digital form. This will also mean that besides the printed cash, the Central Bank of Kenya will also issue the electronic equivalent.
The CBK has made it clear that CBDC is different from Cryptocurrencies such as Bitcoin and Ethereum, meaning the CBK will maintain reserves and deposits to back it up.
But, is Kenya ready for a digital currency?
Methinks those asking this question are either ignorant or just ostriches sinking their heads in the sand. Kenya is one of the most tech-advanced nations in Africa and the idea of having a digital currency is an idea whose time has come.
For those asking, does M-Pesa look like a joke to you? In fact, most Kenyans rarely handle hard cash any more. All we have are text messages confirming the amount we have with nothing tangible.
A typical Kenyan gets paid through the bank. Gets a message via a mobile phone that his bank account has cash. He/she moves the cash to M-Pesa (gets a message), starts to pay bills while receiving messages. In the end, they remain with a message confirming how much they are remaining with.
M-Pesa was the first of its kind in Africa. Many giants have come to Kenya to benchmark on the platform.
What is more, millions of Kenyans are already transacting using Cryptocurrencies such as Bitcoin. Kenyans dealing with Bitcoins were ahead of CBK in adopting the use of digital currency.
Are there risks?
Yes. Being a tech-advanced country, Kenya is a hotbed of cybercriminals and hackers. Reports indicate how Kenyan commercial banks have been losing billions of shillings to hackers. The chances of this digital currency being hacked are high.