NAIROBI, Feb 10 (Reuters) – Kenya’s central bank has invited the public to comment on the potential introduction of a digital currency, breaking with its initial opposition to crypto-assets.

The East African country pioneered mobile money payments with Safaricom’s M-Pesa in 2007, but its central bank has not issued digital currency due to concerns about risk.

Risks included commercial banks being constrained by the movement of digital currency deposits and the financial exclusion of those without access to technology infrastructure or knowledge, the bank said on Thursday.

Join now for FREE unlimited access to Reuters.com

Register

A digital currency could limit the effectiveness of monetary policy and increase money laundering risks, the bank said.

But the bank also said a digital currency could offer some benefits, including reducing the costs of cross-border payments.

“The balance of risks and benefits of central bank digital currency will vary from economy to economy,” the bank said in a statement.

For the digital currency to work, the bank said, all countries in the region needed to participate in order to flatten “the corresponding multi-level banking structure” and shorten payment chains.

Tanzanian government officials said last year that they were working on a directive from the president to prepare for the introduction of digital currencies.

The central bank and other public bodies in Kenya are required to seek public input before making major decisions.

Join now for FREE unlimited access to Reuters.com

Register

Reporting by George Obulutsa and Duncan Miriri. Editing by Jane Merriman

Our standards: The Thomson Reuters Trust Principles.