Blockchain taskforce mulls regulated digital currency
The taskforce appointed to establish whether the country is ready for blockchain technology has recommended the adoption of a digital currency.
The team in an a bridged report seen by Citizen Digital says digital currency should be fixed in nominal terms, universally accessible, and valid as legal tender for all public and private transactions.
The taskforce has proposed the formulation of a Central Bank Digital Currency (CBDC) which will in essence operate in fixed nominal terms and as a valid legal tender.
The 11 member task group sees it fit to move the country’s monetary outlook into the digital age pointing to the lucrative opportunities presented in the emerging technologies to drive growth.
There has been raging debate on the local use of digital currencies that has put government agencies against each other…to adopt digital currency or not.
While the Central Bank of Kenya and the Capital Markets Authority have argued that it was an idea not ripe for the country, the taskforce has taken a more liberal approach.
Speaking to Citizen Digital, Distributed Ledgers and Artificial Intelligence taskforce chairman Bitange Ndemo said a sovereign digital currency would ease funds transfers amongst the state citizenry while offering transparency into completed transactions.
“The digital is a fiat currency, it is the same as cash. Once you pile up, you can go to any bank and take the cash. Actually there is no need to print cash if we get used to digital cash. The good thing about digital cash its traceability, Ndemo paid so and so and this will deal with many other issues such as corruption,” Mr Ndemo said.
The taskforce took in view from over 200 presenters, across diverse sectors seeking to find a perfect fit to integrate blockchain technology.
Getting to the new age of monetary management will however be no easy task as stated in the taskforce’s abridged report.
“The process of introducing a successful CBDC in Kenya requires grounded and graduated forms of regulatory sandboxes, technical piloting and smart regulations….The success of a national roll out process on the other hand, requires alignment within monetary and fiscal policy drivers and the political class,” reads part of the report.
With the government in agreement that block chain technology must be incorporated in its operations, Mr Ndemo said that this has to be backed with a trusted identity for every citizen that will enable encrypted end to end data
“Trusted identity means like when the government gives something like housing, nobody can tamper with it. If you can recall Umoja was built for poor people but sold to the rich and rented to the poor. (with blockchain) The identities we have sometimes your birth certificate has no relevance to your ID, you passport, and even your driving license can help trace individuals,” he said.
The taskforce is currently in the process of coming up with more use cases of the technologies before handing over a final report to ICT cabinet secretary Joe Mucheru at the end of the month.