Browsing: cbdcs in africa

Bola-Tinubu

Nigeria’s blockchain space has significantly influenced the continent’s tech transformations within the last decade. With Nigeria starting to settle down with its new government, attention will be drawn to its development as Africa’s Crypto leader. President Bola Tinubu expressed great interest in the rapid crypto adoption in Nigeria during the presidential campaigns. Moreover, Nigeria is the first African country to launch its CBDC and stands tall in developing the crypto industry. President Tinubu promised additional plans to improve this idea.…

CBDCs in Africa

When CBDCs first came to the fore, many touted such a move as a game-changer in digital finance. Many had thought that the adoption of CBDCs in Africa would take the shape of the adoption of cryptocurrencies, where the region leads in many aspects. However, challenges remain. Lack of the requisite infrastructure, low levels of financial literacy, and operational and regulatory challenges have combined to contribute to low penetration and adoption rates for CBDCs.

The lack of adoption is a current failure point for many launched CBDCs. Nigeria’s eNaira had a million customers one year into its launch, a smattering of its 221 million population. The real challenge of CBDCs lies in developing a clear sense of purpose. African central banks must answer to the kind of role that CBDCs will play in the economy and financial systems.…

Digital payments in Africa
  • An infusion of new investments and regulatory transformations is shaping financial interactions and digital payments in Africa.
  • Africa’s digital payments operations produced around $24 billion in revenue in 2020, comprising domestic and cross-border payments.
  • For Africa’s digital transition to run smoothly, a cohesive environment that ensures investment and funding remains necessary.

Human commerce constantly seeks more efficient exchange mediums, and this innovation is currently intensifying. Consequently, how individuals pay for products and services has changed dramatically in the 21st century. Digital payments in Africa are gradually replacing cash, and cryptocurrencies and virtual currencies have lately emerged as substitutes for conventional money concepts.

Africa has kept up with, and in some instances led, technological advancement. An infusion of new investments and regulatory transformations is shaping financial interactions and digital payments in Africa. Cash remains king in Africa. However, research indicates that its dominance may be challenged in the future years as …

The issuance of CBDCs in Africa might also promote emerging digital technologies and their incorporation into the broader African economy

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…