Digital currency plan gains traction
THE Reserve Bank of Zimbabwe (RBZ) has moved a step closer to introducing a central bank digital currency (CBDC), as it actively explores the direction that regional peers have taken.
Several central banks are at various stages of introducing CBDCs to help their markets move away from cryptocurrencies, which trade independently, outside regulation.
Some central bank chiefs have warned that there is a great risk that cryptocurrencies may crash, triggering mayhem in affected markets.
In a presentation made during last week’s CEO Africa Roundtable annual conference in Victoria Falls, RBZ deputy director for economic research, Nebson Mupunga said officials would be moving to gauge market sentiment and awareness of digital currencies after Cabinet gave them the nod to explore ways to introduce CBDC in Zimbabwe.
“The Cabinet has approved that the bank explores the possibility of introducing a CBDC in the economy,” Mupunga said.
“We are going to undertake a survey to gauge consumer awareness and readiness to adopt the CBDC. This is what we are doing in the bank in terms of the digitisation agenda on the monetary front.”
Mupunga said markets should be careful with cryptocurrencies.
“We talk about the CBDC that central banks are exploring, they are also public money. But crypto assets are not money. That is why central banks have been cautioning people and businesses not to venture into such assets. We have not banned them, but issued a cautionary statement to people trading in cryptocurrencies because of the risks that are embedded in those assets,” he added.
A United Nations official based in The Gambia, who attended the Victoria Falls conference said cryptocurrencies were a viable option because in the case of a financial meltdown, they help economies to avoid printing money.
“Cryptocurrency in the case of Zimbabwe makes sense because it came in after the global financial crisis when the world’s central banks responded by printing money,” said UN official George Lwanda.
“People said let’s use cryptology, technology, and finance to come up with a solution. The second thing I would like to say is that we have cases where because of the challenges the Zimbabwean economy faces you have multiple exchange rates, it’s easier to solve that by having a cryptocurrency for a certain sector, a cryptocurrency for another sector.”-newsday
