Kenya’s Central Bank Launches Digital Kwacha Sandbox for CBDC Testing

The Central Bank of Kenya has launched a regulatory sandbox to test a Central Bank Digital Currency (CBDC), dubbed Digital Kwacha. The pilot, starting Q3 2024, will involve 10,000 users and 50 merchants in Nairobi and Mombasa, testing offline payments, programmable transfers, and interoperability with mobile money. CBK Governor Kamau Thugge emphasized that the CBDC will complement—not replace—cash and M-Pesa, enhancing financial inclusion and payment efficiency. The sandbox will run for 12 months, with findings informing a national rollout decision in 2025. Kenya joins Nigeria, Ghana, and South Africa in exploring digital fiat currencies.