By: Natasha Nthenya
In Kenya, about 21.75 million people have a smartphone and use the internet which is, 40 percent of the Kenya population. This number will affect the new digital currency Central Bank Digital Currency (CBDC) meant to be introduced by the Central Bank of Kenya (CBK) as the currency requires access to the internet.
Statistics show that 56 percent of Kenyans with cell phones have a feature phone which is going to be hard for the users to transact using the CBDC. On 10th February this year, Central Bank issued a discussion paper seeking the public’s comment and view on the CBDC technology which is meant to ease cross-border payments and transaction costs.
According to Central Bank Governor Patrick Njoroge, the smartphone problem might force the bank to delay the CBDC currency. Mr. Njoroge says that the use of digital currency on the 4G-enabled phones will hurt Kenya’s financial inclusions and keep out half of the Kenyans from using CBDC.
“The CBDC will have a minimum viable technology requirement, which may be a sort of fourth-generation (4G) environment. There is an argument to be made that such development could lead to greater financial exclusion such that some people may fall out of the financial systems just because we have adopted a CBDC. We may decide therefore that we should wait a little more until everyone catches up because at this moment the lover level technologies are quite prevalent with us “said Mr. Njoroge.
CBDC will help reduce the risk of money laundering. Just like cryptocurrency, a CBDC currency is a digital token. But unlike cryptocurrency which is stored on a decentralized blockchain network, CBDC is issued and stored using a more centralized method.