The prospects for the adoption of CBDCs in Africa

The low adoption of CBDCs in Africa, which would hinder the policy objectives central banks hope to achieve, remains a significant concern for African central banks. 90 per cent of central banks were involved in CBDC analysis or projects in 2021. The percentage of central banks undertaking pilot projects reached 26 per cent Access to digital cash as an alternative payment mode is a critical factor driving the adoption of CBDCs in Africa. Providing access to those without internet or smartphones is a significant challenge for adopting CBDCs in Africa. What is a CBDC A central bank digital currency (CBDC) is a digital currency valued in the national unit of account that serves as a central bank liability. Initially, central banks globally were cautious about CBDCs, but their interest has grown recently. According to a recent Bank of International Settlements (BIS) poll, 90 per cent of central banks were involved in CBDC analysis or projects in 2021. The percentage of central banks undertaking pilot projects reached 26 per cent. Monetary systems evolve in tandem with technological advancements. Digital finance technologies and new private forms of digital currency can potentially improve the monetary system. However, structural weaknesses render cryptocurrencies inappropriate as