Recent reports written by central banks and others like the Bank of International Settlement (BIS) clearly state that they fear the impact on commercial banks that implement a retail Central Bank Digital Currency (CBDC). However, CBDC is a relatively risk-free alternative compared to today’s fragile global financial system.
Several African Central Banks are currently exploring CDBCs to streamline either cross-border payments or retail settlements including Ghana, South Africa, Zimbabwe, Rwanda, and Nigeria. CBDCs are also central to efforts towards securing financial inclusion and replacing high-cost remittances for African countries.
The launch of CBDC pilots by the South African Reserve Bank and the sandbox testing of Ghana’s planned CDBC exhibits the continent’s curious yet cautious approach