Central Bank of Kenya Publishes a Discussion Paper on a Potential Central Bank Digital Currency (CBDC)

The Central Bank of Kenya (CBK) has published a discussion paper examining the applicability of a potential Central Bank Digital Currency (CBDC) in Kenya.

The paper details the following aspects of a possible Kenyan CBDC:

  • CBDC opportunities and risks
  • Key elements for consideration
  • Use case for a Kenyan CBDC

According to the paper summary, CBK notes:

“Rapid technological innovation is ushering in a new era of public and private digital money. The transition to digital payments has been accelerated by the proliferation and easy access to mobile devices, as well as the emergence of Fintech firms that constantly innovate new products to run on these devices. New digital currencies have emerged to facilitate payment transactions.

They include:

  • Electronic Money (e-Money)
  • Cryptocurrency
  • StableCoin
  • Central Bank Digital Currency (CBDC)

CBDC is a digital currency issued by the central bank and intended to serve as legal tender.

The Central Bank of Kenya (CBK) has been at the forefront of monitoring these developments. This is critical given that policy choices among central banks globally should reflect the specific jurisdiction requirements and circumstances at a point in time. This has informed the development of this discussion paper.”

– Central Bank of Kenya (CBK)

The discussion paper is centred on the following key focus areas:

  • Kenya’s payments landscape
  • CBDC opportunities and risks
  • Overview of other jurisdictions’ CBDC projects
  • Applicability of CBDC in Kenya


SEE ALSOWe Are Actively Exploring the Feasibility of Adopting a CBDC, Says Central Bank of Zimbabwe February 2022 Monetary Report


According to CBK, the consideration to introduce a CBDC in the payment systems in Kenya would not majorly focus on enhancing access to financial services given the existing and growing penetration of mobile money which is already robust, inclusive, and highly active. The consideration could however target:

  • Cost reduction
  • Interoperability
  • Enhancing cross-border payments

“Looking to the horizon, it will be critical to connect our payment systems across the region and globally. Existing proposals indicate that CBDC might hold the potential to achieve this interoperability.”

– Central Bank of Kenya (CBK)

Taking a test-and-learn methodology, CBK believes the usefulness of technology does not lie in its uniqueness but in its ability to solve a pressing societal problem. Thus, as with mobile money, the focus of the assessment of CBDC innovation must be on functionality and the problem it resolves for the people rather than the underlying technology.

Interestingly, CBK notes:

“In the case of Kenya where electronic money has taken root, the proposed value solution offered by CBDC seems to be already met.

A key opportunity where CBK sees potential value is the use of CBDC in facilitating cross-border transactions. Currently, international currency transactions are expensive and individuals are charged high fees to move funds from one country to another, especially when it involves currency conversions. CBDC could positively disrupt the cross-border market by making it more efficient and less costly.

– Central Bank of Kenya (CBK)

In light of the above, the Central Bank of Kenya is inviting the pulic, industry, and stakeholders to review this discussion paper on CBDC and provide feedback and ideas to be considered when assessing the use case for a CBDC in Kenya.

CBK has provided key questions which will guide the response by the public as part of the review of the discussion paper.

Call for Comments Questions:

  1. Which institution/group do you believe is responsible for tackling financial exclusion in any given domestic market? [Multiple answer question]
    a. Central Bank
    b. National Government
    c. Commercial Banks
    d. Non-Profits/Third Sector
    e. The individual
  1. How important do you believe the topic of financial inclusion to be in relation to the development of domestic retail CBDC? [Only one answer]
    a. Vital (It won’t develop without it)
    b. Important
    c. Somewhat important
    d. Not important
    e. Completely unrelated (no bearing whatsoever

3. How would a CBDC impact financial inclusion, either as part of a wider strategy or in isolation?

4. How would CBDC affect cross-border transactions, either as part of a wider strategy or in isolation?

5. How would a CBDC affect the financial sector? What tools could be considered to mitigate any adverse impact of CBDC on the financial sector?

6. What factors would determine the level of adoption of CBDC as a means of payment in Kenya?

7. What advantages and disadvantages do you believe CBDC would introduce over the existing digital payments landscape in Kenya?

8. What additional potential opportunities, considerations, or risks of a CBDC may exist that have not been discussed in this paper?

9. Are there additional ways to manage potential risks associated with CBDC that were not discussed in this paper?

10. Which model of CBDC do you believe would be the most suitable in Kenya and why?

11. Are there additional design principles that should be considered that were not discussed in this paper?

12. How could a CBDC be designed to achieve maximum interoperability with the existing payment platforms in Kenya?

Your response may be submitted not later than May 20, 2022, to the following email address [email protected], or through the online form via this link:



Read / Download the full Discussion Paper by CBK here


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