Kenya's central bank does not consider the issuance of a digital currency a compelling priority, but it will continue monitor developments in the area to help future decisions on issuance, it said on Friday.
In February last year, the bank invited public opinions on the possibility of a central bank digital currency CBDC, in a shift from its original opposition to crypto assets, but it has decided not to issue any.
On the global stage, the allure of CBDCs is fading, the bank said in a statement. In the short to medium term, implementation of a CBDC can not be a compelling priority in Kenya. Central banks that had rushed to issue the currencies are now facing challenges that are hindering implementation, it said, adding that other problems have also arisen.
The instability in the global cryptocurrency assets market has raised concerns and necessitated a careful review of the crypto assets market.
The bank said that innovation and technology risks were a key factor in the banking industry's growth.
Kenya could lean heavily on existing technologies to address any problems in payments, it said.
The East African nation is famous for its widespread use of mobile money payments.
Safaricom's M-Pesa platform, which was launched in 2007 and dominates mobile payments, has transformed from a money transfer service to a full-fledged financial services provider of payments, savings, insurance and micro-loans. In a population of almost 48 million, the platform has more than 30 million active users.
In 2021, Nigeria became the first African nation to launch a digital currency.