Central bankers in Kenya and Nigeria attacked cryptocurrencies but backed Central Bank digital currencies.
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- Kenyan and Nigerian central bankers criticize cryptocurrencies.
- They believe crypto poses risks to financial stability.
- They say that CBDCs could bring the poor into the financial system.
Both Nigeria and Kenya have been African nations that have had a changing relationship with respect to cryptocurrencies. In fact, Nigeria was going down the path of banning them, but last year he changed his mind. It has been quite different with central bank digital currencies, CBDC. For example, Nigeria has one of its own: the e-naira that will be officially launched in October 2021.
Now statements have been shared from the heads of the central banks of both countries, which call cryptocurrencies are “too unstable for them to become a widely used payment method “. In addition, bankers claim that cryptocurrencies also pose a risk to financial stability, as published in the media, including Reuters y Bitcoin.com.
Volatiles
Within their statements, central bankers from Nigeria and Kenya said that cryptocurrencies are too volatile to become an acceptable payment method.
According to the report of Reuters, Kingsley Obiora, deputy governor of the Central Bank of Nigeria (CBN) and Kenya’s central bank governor, Patrick Njoroge, believe that a digital currency from the central bank is more likely to reduce the financial exclusion gap.
Central bankers added that only one central bank digital digital technologies are these electronic tools that have the ability to generate, store or even process data. currency currency is a medium of exchange that defines value. (CBDC) can reduce the cost of transactions.
Obiora, who was speaking at a virtual summit moderated by the International Monetary Fund (IMF), explained why his institution opposes cryptocurrencies, saying:
The volatility a statistical measure of dispersion of returns, measured by using the standard deviation or variance between returns from that same security or market index. they create can become a source of instability in the system.
Kenya will also issue a CBDC
As we said, Nigeria already has your CBDC, the e-naira . However, it is not until now that it is known that Kenya also aspires to have its own.
Njoroge, the governor of the Bank of Kenya, spoke about cryptocurrencies as hype. However, he hinted that his institution may eventually regulate private cryptoassets as a “wealth product.” He also hinted that the Central Bank of Kenya (CBK) could eventually follow in Nigeria’s footsteps and issue their own CBDC.
However, unlike the Nigerian bank that is trying to increase the number of people financially included through its CBDC But the Kenyan bank will not make this a priority as it says this has been achieved with mobile money, Njoroge explained.
Sources: Reuters, Bitcoin.com , archivo
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