The Central Bank of Kenya (CBK) on Friday, June 2, announced that it would not pursue the rollout of digital currency in the short and medium term.
In a statement, CBK indicated that the decision was arrived at after collecting views from Kenyans and considering other global factors.
CBK detailed that there were still several risks the technological advancement faced, citing other countries that had adopted the new method of payments.
Some risks identified by the respondents who forwarded their views to CBK were high implementation costs, cyber security risks, and financial exclusion.
"Central banks that were first to roll out Central Bank Digital Currencies (CBDCs) have recently faced challenges that have hampered implementation.
Additionally, recent instability in the global crypto assets market has amplified concerns and the need to review innovation and technology risks carefully.
"Against this backdrop, implementation of a CBDC in Kenya may not be a compelling priority in the short to medium term," read the statement in part.
Nonetheless, despite the decision, CBK maintained that it did not rule out the rollout of the currency in the future.
It was also revealed that studies being done in the industry by leading global players would help shape the currency's adoption in the future.
"Major global central banks have deferred the decision on adopting CBDCs. This measured approach is consistent with the approach that CBK is taking.
"CBK has also been collaborating with other central banks that have developed a proof of concepts for CBDCs, to benefit from their experience," CBK detailed.
The statement also noted that several Kenyans and players in the sector had expressed optimism over the move to roll out the digital currency citing advantages such as increased efficiency and transparency in the banking sector.
CBK called on Kenyans and other players in the sector to give their views on the planned rollout of the currency on February 10.