Kenyan and Nigerian Financial Institutions Condemn Cryptocurrency While Promoting CBDCs

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Both monetary authorities have been skeptical of cryptocurrency, according to Reuters. For example, Obiora claimed that cryptocurrencies were not steady enough, noting volatility as a potential factor in future adoption.

Central bankers in Kenya and Nigeria have indicated that central bank digital currencies (CBDCs) could mitigate the threats that cryptocurrencies pose to financial stability, according to Reuters (June 11).

Bringing the impoverished into the financial system and lowering transaction costs are two examples.

Inclusion could be aided by Nigeria’s eNaira digital money, which was launched in October. The money was met with mistrust from both crypto and industry users, according to the study. The amount the coin was spent was not disclosed by Kingsley Obiora, deputy governor of Nigeria’s central bank.

Meanwhile, Kenya is rumored to be exploring creating its own digital currency to assist reduce the cost of cross-border payments and other transactions.

Both central banks have been critical of cryptocurrency, according to Reuters. For example, Obiora claimed that cryptocurrencies were not stable enough, noting volatility as a potential factor in future adoption.

This comes as crypto assets have performed well in Nigeria, despite the fact that banks have been prohibited from dealing with them since February of last year. According to the study, they’ve also done well in Kenya. According to Kenyan central bank Governor Patrick Njoroge, there has been “a lot of hype,” and crypto assets may be regulated as a wealth product.

See also: 90% of Central Banks Working on CBDCs, BIS ReportsIn other CBDC-related news, according to a research from the Bank of International Settlements (BIS), 90 percent of the central banks surveyed were considering creating one.

Around two-thirds of the 81 banks polled, representing 90 percent of the global economy, are actively developing or experimenting with one.

The goal to make domestic payments more efficient and ensure financial stability has sparked interest in CBDCs, according to the paper. It was also critical to introduce more cross-border payment capabilities in order to shorten long transaction chains.

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