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BIS survey finds greater focus on transmission and financial inclusion among African institutions

CBDC helps African central banks implement monetary policy. A CBDC would save money on banknotes, transportation, and storage. Sub-Saharan Africa sends two-thirds of the world's money.

This paper, based on a survey to central banks, analyses the development, motivations and concerns of central bank digital currencies (CBDCs) in Africa relative to other emerging and developing regions. The interest of African central banks in CBDCs has shot up in recent times. While all of those surveyed are analysing CBDCs, only few have projects at advanced stages (pilot or live). Some countries, in particular in East and West Africa, stand out as promoting fast payment systems through mobile money, but half of the surveyed central banks think that CBDCs can provide a superior solution. Like their peers, a key motivation for African central banks is achieving greater payment system efficiency. In addition, a higher proportion than in other regions see potential benefits for monetary policy, an important consideration for a region where the transmission mechanism is weak. Central banks in Africa also place more emphasis on financial inclusion. These factors could foster CBDC issuance and favour adoption. At the same time, they are more worried than other regions about cyber security risks and cross-border spillovers and are also concerned about high operational burdens. These factors and others, such as the high degree of informality that may hinder adoption, favour a cautious approach. All in all, differences in motivations, concerns and other country-specific factors determine how central banks are approaching CBDCs.

A survey of the continent’s central banks shows optimism about greater efficiency and inclusion, but several drawbacks remain; Nigeria already has an operational retail CBDC.

The Japanese central bank plans to make a decision on whether to issue a digital currency by 2026.

Speech by Mr Pablo Hernández de Cos, Governor of the Bank of Spain, at the 20th Anniversary Conference of the BIS Representative Office for the Americas, Mexico City, 20 November 2022.

The RBI is planning to test the "digital rupee" in retail. Within a month, the pilot will debut. Digital rupees will augment the present payment system, not replace it. Each bank testing CBDC will

Speech by Mr Yannis Stournaras, Governor of the Bank of Greece, at the 2022 Conference of Mediterranean Central Banks "Building resilience in uncertain times: safeguarding financial stability, encouraging investments", jointly organised by the Central Bank of the Republic of Turkey, the Organisation for Economic Co-operation and Development (OECD), the European Institute of the Mediterranean (IEMed) and the Bank of Spain, Istanbul, 31 October 2022.

The digital rupee is intended as a supplement to the current payment system and not its replacement.

The founder of FTX provoked the withdrawal of his legal team and now faces the possibility of extradition to the United States.

The discussion paper reviews the literature on the impact of CBDCs in large, developed economies and draws some conclusions and specific design elements.

CBDC,USA

Speech by Mr Burkhard Balz, Member of the Executive Board of the Deutsche Bundesbank, at the Bitkom Digital Euro Summit, virtual event, 15 November 2022.

Banking giants including BNY Mellon, Citi, U.S. Bank and Wells Fargo will be issuing tokens and settling transactions through simulated central bank reserves as part of the pilot.

Project Aurum with HKMA also explored a token model