Kenyan and Nigerian central bankers have said central bank digital currencies (CBDCs) could solve the risks cryptocurrencies have for financial stability, Reuters wrote Saturday (June 11).
This includes bringing the poor into the financial system and cutting transaction costs.
Nigeria’s eNaira digital currency, which was rolled out in October, could help out with inclusion. The report noted that the currency was met with skepticism from both crypto users and industry users. Kingsley Obiora, deputy governor of Nigeria’s central bank, didn’t disclose the amount the coin has been used.
And meanwhile, Kenya is reportedly considering its own digital currency to help bring down costs for cross-border payments and other transactions.
Reuters reported that both central banks have been critical of crypto. Obiora, for instance, said cryptocurrencies weren’t stable enough, citing the volatility as a possible factor in future use.
This comes as crypto assets have been doing well in Nigeria, defying the ban on banks handling them since February of last year. And they’ve done well in Kenya, too, the report said. Kenya central bank Governor Patrick Njoroge saying there had been “a lot of hype,” and that crypto assets might be able to be regulated as a wealth product.
In other news related to CBDCs, a report from the Bank of International Settlements (BIS) says that 90% of the central banks it surveyed were at least looking into the creation of a CBDC.
And around two-thirds of the 81 banks surveyed, from nations representing 90% of the world economy, are actively working on one or experimenting.
The report noted that interest in CBDCs has been born of a desire to make domestic payments more efficient and make sure financial stability is enshrined. In addition, it was important as well to add more cross-border payments capabilities, cutting long transaction chains.