[WATCH] Kenya Central Bank Governor Warns Against Imposing Cryptocurrencies By Citing El Salvador

“You cannot leave the population behind. You can not say, 'well, this is a decision of the Monetary Authority and we have the mandate and law.' At the end of the day, the population may not buy the whole thing. You can see what happened in El Salvador” Said Dr Njoroge.

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In the wake of several countries now adopting or considering to adopt cryptocurrencies in one form or another, Kenya Central Bank (CBK) Governor, Dr. Patrick Njoroge, is warning that any actions that do not involve the public risk being ineffective.

Speaking during an IMF event, Njoroge said:

“You cannot leave the population behind. You can not say, ‘well, this is a decision of the Monetary Authority and we have the mandate and law.’

At the end of the day, the population may not buy the whole thing. You can see what happened in El Salvador.”

– Governor, Central Bank of Kenya (CBK)

Dr. Njoroge made those remarks while speaking at a panel discussion dubbed “Central Bank Digital Currency and Private Digital Payments in Nigeria and Kenya: Challenges and Opportunities for Sub-Saharan Africa.”

The event was organized by the African department of the International Monetary Fund (IMF).

Concerning crypto generally, the Governor added that ‘regulation is key. Anything without regulation is a non starter.’ He reiterated that Central Bank Digital Currencies (CBDCs) may have several benefits that CBK is still analyzing, including:

  • Promoting innovation
  • Helping to reduce the cost of transactions
  • Improving cross-border transactions

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SEE ALSO: Kenya Central Bank to Regulate Financial Super Apps Like M-PESA

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Specifically on the point of cross-border transactions, the Governor said CBDCs will significantly enhance the efficiency of such payments as long as countries work together.

Njoroge further mentioned that CBK has been working together with a number of Central Banks in Africa and outside the region, such as the Monetary Authority of Singapore (MAS), on how to work together to roll out the government-backed digital currencies.

The Central bank of Kenya (CBK) in February 2022 published a discussion paper on its Central Bank Digital Currency (CBDC) and it sought public comments on the potential benefits and risks, and related policy considerations, of introducing a CBDC in Kenya.

Njoroge said they are currently now analyzing the comments received.

The Governor also reiterated CBK’s position on the fact that unrestricted use of cryptocurrencies like bitcoin in Kenya remains unchanged.

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RECOMMENDED READING: 92% of Banks in Kenya Have Implemented Online Banking, Says Central Bank of Kenya

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