Kenya’s blockchain & artificial intelligence taskforce has proposed a digital asset registry and a digital currency for the country citing that they can create trust.
According to taskforce chairman Bitange Ndemo, the creation of a digital asset registry should come first followed by the digital currency. The digital asset registry will enable small enterprises to have alternative sources of funding other than the traditional banks. “A digital currency 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,” he said.
SMEs would be required to create a portfolio composed of information such as websites, videos, and logos which potential investors can view in order to facilitate the establishment of a digital asset registry. “The blockchain mitigates trust. What has been lacking is that the government did not have an infrastructure to ensure trust in blockchain technology,” Ndemo said.
The recommendations come after Treasury CS Henry Rotich received orders from parliament to look into digital currencies in the country within two weeks.
The digital currency will be fixed in nominal terms, a legal tender for both private and public transactions, and universally acceptable. According to the taskforce’s report, it is anticipated to create jobs and improve creativity. In addition, the taskforce has recommended a trusted identity for every Kenyan citizen.
The digital currency will be introduced into the market through an initial coin offering (ICO). The taskforce is working with the Central Bank of Kenya (CBK) towards this end. “We have been talking to the central bank so that we can create some sort of coin. You are going to hear more of ICOs,” Ndemo said.
The report further states, “The process of introducing a successful Central Bank Digital Currency (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.”
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The 11-member blockchain taskforce was created to establish a roadmap that will guide the application of emerging technologies as blockchain in various sectors such as land administration, single digital identity, and public service in Kenya. It is currently working on more blockchain technology use cases before submitting a final report to ICT Cabinet Secretary Joe Mucheru at the end of July.
