Browsing: adoption of cbdcs in africa

In full throttle the world is diving deeper into the Fourth Industrial Revolution (4IR).  Resultantly, among the new wave of technologies marking this new era is the adoption of digital currencies such as a CBDC. This relatively nascent era of economic disruption has birthed a need for digital currencies and we might very well be in the twilight years of using the traditional fiat currency. In his book, “The Future of Money: How the Digital Revolution is Transforming Currencies and Finance” economist Eswar Prasad, predicts that the era of cash is drawing to an end and that of central bank digital currencies and other forms of digital cash has begun. Indeed the future of money is evolving and already several countries across the globe are particularly piloting the Central Bank Digital Currencies (CBDCs).

In Africa, albeit slow, the concept of CBDC’s adoption is gaining momentum with several nations in the …

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 …