According to the CBK, banks highlighted that crypto and NFTs offer alternative avenues for payments and investments, with the potential to boost transaction speed and lower costs.
The banking floor at the Central Bank’s headquarters in Nairobi | Credit: Central Bank of Kenya
A new survey by the Central Bank of Kenya (CBK) has revealed that over 30% of commercial and microfinance banks in Kenya are ready to explore virtual assets, including cryptocurrencies and NFTs.
The detailsAccording to CBK’s 2024 Innovation Survey, 31% of commercial and microfinance banks said they are “highly likely” to engage in activities involving virtual assets.Banks noted that crypto and NFTs offer new avenues for investment and payments, promising faster transactions and lower costs.However, many also flagged risks around money laundering, terrorism financing, fraud, cybersecurity, and the volatile nature of crypto markets.A significant 35% of institutions said the lack of clear regulation is a major barrier to digital innovation, not just for crypto, but also in areas like digital lending, open banking, and blockchain use cases.Zoom inInternally, 84% of banks and 79% of microfinance banks identified changing customer behavior as the most influential factor shaping their innovation roadmaps.Externally, the biggest motivators were the rise of new technologies (79%) and mounting regulatory and compliance demands (74%).The competitive landscape, interestingly, was seen as less of a factor — only 32% of banks and 43% of microfinance banks cited it as a top driver for innovation.Zoom outKenya is one of the leading African countries for cryptocurrency adoption and usage. However, the absence of precise regulation poses risks. In March 2024, the FATF added Kenya to its grey list, citing crypto-related money laundering concerns.The government is now actively working to formalize the crypto sector through the proposed Virtual Asset Service Providers Bill, 2025.The bill would require crypto firms to set up local offices, appoint directors, and register with a regulatory body like the Capital Markets Authority (CMA).