According to the IMF, 9 out of 13 African nations pursuing CBDCs are still in the research phase
According to the IMF, 13 African nations have considered having central bank digital currencies (CBDCs), with 9 countries in the research phase, 3 in the piloting stage, and 1 that has already deployed its own CBDC.
By Anna B Kiwanuka
The International Monetary Fund (IMF) has reported that 13 African nations have considered having central bank digital currencies (CBDCs). CBDCs are digital versions of cash that are more secure and less volatile than crypto assets because they are issued and regulated by central banks.
According to the IMF research, the countries are either researching, implementing, or have adopted CBDCs.
According to the IMF, the one out of the 13 with its own CBDC is Nigeria with the eNaira. Ghana, South Africa, and the Kingdom of Eswatini are in the piloting stage meaning they are getting closer to implementing a CBDC.
As part of the second stage of Project Khokha, the South African Reserve Bank is experimenting with a wholesale CBDC that can only be used by financial institutions for interbank payments. Additionally, the country is taking part in a cross-border experiment with the central banks of Singapore, Malaysia, and Australia.
The Bank of Ghana, by contrast, is testing a general-purpose or retail CBDC, the e-Cedi, which can be used by anyone with either a digital wallet app or a contactless smart card that can be used offline.
Kenya, Madagascar, Mauritius, Namibia, Rwanda, Tanzania, Uganda, Zambia, and Zimbabwe are still researching the concept of countries adopting digital currencies and therefore weighing their options.
Governments will need to increase access to digital infrastructures like phone and internet connectivity, according to the IMF.
The international organization also asserts that in order to manage the threats to financial integrity and data privacy, particularly those posed by possible cyberattacks, central banks will need to acquire the knowledge and technical competence. Additionally, there’s a chance that people would withdraw excessive amounts of cash from their banks to buy CBDCs, which could limit the banks’ capacity to lend.
The IMF also emphasizes that the impact of CBDCs on the private sector of digital payment services, which has made significant progress in promoting financial inclusion through mobile money, will also need to be taken into account by central banks.
Sourced from BitKE