Cryptocurrencies are very unstable to become a widely used payment method, the central banks of Nigeria and Kenya reportedly said. In addition, bankers argue that cryptocurrencies also pose risks to financial stability.
narrowing the financial exclusion gap
The central banks of Nigeria and Kenya have stated that cryptocurrencies are too unstable to be an acceptable payment method. Bankers also argued that cryptocurrencies pose a risk to financial stability, according to a Reuters report.
reportBankers Kingsley Obiora, deputy governor of the Central Bank of Nigeria (CBN), and Patrick Njoroge, governor of the Central Bank of Kenya, say they believe central bank digital currencies are likely to narrow the financial exclusion gap. The central bankers added that only a central bank digital currency (CBDC) can lower transaction costs.
In the report, Obiora, who spoke at a virtual summit moderated by the International Monetary Fund (IMF), is quoted to explain why his institution opposes cryptocurrencies. He said.
The volatility it creates can be a source of instability in the system.
Kenya issues CBDC
Njoroge is quoted in the report as questioning what appears to be hype related to cryptocurrencies. Nevertheless, the Kenyan central bank governor hinted that his institution may eventually regulate crypto assets as “wealth products. “Njoroge said that in addition to regulating privately issued digital currencies as wealth products, the Central Bank of Kenya (CBK) will eventually follow in Nigeria’s footsteps and issue its own CBDC, he suggested.
{However, Njoroge explained that unlike the CBN, which is trying to increase the number of people involved in finance through its recently launched CBDC, the CBK will not make this a priority because of what is being accomplished with mobile money.
As Bitcoin.com News previously reported, the Central Bank of Kenya had sought public views and perceptions on CBDC. According to a Reuters report, the CBK is currently in the process of validating public feedback.
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