According to the central banks of Nigeria and Kenya, cryptocurrencies are too unstable to become a widely used payment method. In addition, bankers argue that cryptocurrencies also pose a risk to financial stability.
Closing the gap in financial isolation
The central banks of Nigeria and Kenya have said that cryptocurrencies are too volatile to be an acceptable payment method. Bankers also insisted that cryptocurrencies pose a risk to financial stability, Reuters said in a report.
In accordance with reportBankers, namely Kingsley Obiora, deputy governor of the Central Bank of Nigeria (CBN) and Kenyan central bank governor Patrick Njoroge, believe that a central bank digital currency has a better chance of closing the financial exclusion gap. Central banks added that only a central bank digital currency (CBDC) could lower the cost of transactions.
In the report, Obior, who spoke at the International Monetary Fund (IMF) virtual summit, is quoted and explains why his organization opposes cryptocurrencies. He said:
The instability it creates can become a source of instability in the system.
Kenya to issue CBDC
For his part, the report cites Njoroge as questioning what he sees as the hype surrounding cryptocurrencies. However, Kenya’s central bank governor has hinted that his institution could end up regulating crypto assets as a “wealth product.” In addition to regulating privately issued digital currencies as a wealth product, Njoroge suggested that the Central Bank of Kenya (CBK) could eventually follow in Nigeria’s footsteps and issue its own CBDC.
However, unlike CBN, which is trying to increase financial inclusion through the recently launched CBDC, CBK will not prioritize this because it was achieved through mobile money, Njoroge explained.
As Bitcoin.com News previously reported, Kenya’s central bank was interested in public opinion and perceptions regarding CBDCs. According to a Reuters report, CBC is currently studying public feedback.
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Credit : news.bitcoin.com