Kenyan and Nigerian Central Bankers Attack Cryptocurrencies but Endorse CBDCs – Central bankers in Nigeria and Kenya have stated that cryptocurrencies are too volatile to be used as a payment method. According to a Reuters report, the bankers also stated that cryptocurrencies pose a risk to financial stability.
According to the report, bankers Kingsley Obiora, the deputy governor of the Central Bank of Nigeria (CBN), and Patrick Njoroge, the governor of the Kenyan central bank, believe that a central bank digital currency has a higher chance of closing the financial exclusion gap. Only a central bank digital currency (CBDC) can lower transaction costs, according to the central bankers.
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Obiora, who appeared at a virtual summit moderated by the International Monetary Fund (IMF), is described in the report as explaining why his institution opposes cryptocurrency.
He stated:
“The resulting volatility has the potential to cause system instability.”
Njoroge, for one, is described in the report as questioning what he considers to be the hype involving cryptocurrencies. Despite this, Kenya’s central bank governor warned that crypto assets could be regulated as a “wealth product” in the future. In addition to regulating privately produced digital currencies as a wealth product, Njoroge speculated that Kenya’s Central Bank (CBK) may one day follow Nigeria’s lead and issue its own CBDC.
Unlike the CBN, which is seeking to boost the number of individuals who are financially included through its recently created CBDC, the CBK will not prioritize this because it has already been accomplished through mobile money, according to Njoroge. The Kenyan central bank had sought the public’s opinions and thoughts on CBDCs, as previously reported. According to a Reuters report, the CBK is currently reviewing public responses.
