The National Bank of Rwanda says it has completed an initial feasibility study that is expected to serve as a basis for deploying its Central Bank Digital Currency , a move that has seen the regulator also open up a public consultation process.
Ordinarily, crypto investors resort to cryptocurrencies owing to hard currency scarcity, galloping inflation, and high costs of making cross-border payments.Monetary authorities around the world are seeking more guidance on how best to pursue digital forms of central bank money, according to the International Monetary Fund 2023 report.The analysis covered economic, functional, legal, and financial aspects, identifying key challenges in Rwanda's financial Sector and payment systems.
"They include; Increase resilience against possible network outages, power failures and natural disasters, improve innovation and competition, as well as contribute to achieving the cashless economy." One of the possible features of a CBDC solution that the report points out is the capability to conduct secure consecutive offline payments in which both the payer and payee are offline, with no mobile network, no internet connection and - to a limited extent - even without power supply.
"A CBDC would preserve the co-existence of sovereign and private money in a digital world. This is not an abstract benefit -- it is the basis for financial and monetary stability, ensuring competition and efficiency in payment markets," he toldBut a CBDC, Ndekezi argues, could generate even more benefits for users by, for instance, improving the confidentiality of digital payments.
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Rwanda's Leap Into Central Bank Digital CurrencyCentral Bank Digital currencies, which are a digital form of central bank-issued money, are being studied globally for their potential benefits ranging from preserving monetary sovereignty versus private currencies to potential financial inclusion gains.
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