The Central Bank of Kenya on Thursday issued a discussion paper that examined risks and benefits for a central bank digital currency in the country While CBDCs have been getting "more attention than ever before" from central banks around the world, "the motivations for the issuance of CBDCs vary across countries, as do the policy approaches and technical designs," according to the paper. Meanwhile, benefits of a Kenyan CBDC remain uncertain, as "the balance of risks and benefits of CBDCs will vary from one economy to another," the central bank highlighted. While a CBDC could enhance financial stability and cross-border payments, as well as mitigate systemic risks, banks' ability for credit creation could get constrained if large deposit balances are moved from bank deposits to CBDC, the central bank explained. Note Kenya ranked fifth in the 2021 Global Crypto Adoption Index, with Vietnam topping the list, according to Chainalysis research.
