- African nations could face challenges due to the introduction of CBDC and crypto.
- A common digital currency for all Central African States is likely in the works per the reports.
- The Central African Republic adopted bitcoin as a legal tender in April.
According to reports, the Bank of Central African States, also known as the Banque des États de l’Afrique, may soon issue a central bank digital currency (CBDC) at the urging of its board.
To modernize payment systems and advance regional financial inclusion, the board, according to a Friday report from Bloomberg, wrote an email urging the regional bank to launch a digital currency.
Charles Hoskinson retweeted the news, writing that he would love to see how this could be implemented practically and safely.
Love to see how this can get implemented practically and safely https://t.co/8sdd7utJm8— Charles Hoskinson (@IOHK_Charles) July 25, 2022
The Central African Republic, or CAR, has not recognized a central bank digital currency despite accepting Bitcoin (BTC) as legal cash in the nation through a law issued in April.
In October 2021, the central bank of Nigeria became one of the first in the area to introduce a CBDC named the eNaira. The Project Khokha program of the Reserve Bank of South Africa is still looking at the possible uses of a CBDC.
The CAR’s decision to accept BTC as a legal tender was challenged by the Bank of Central African States as being “problematic” and having the potential to have a “significant negative impact” on the Central African monetary union.
Countries in Sub-Saharan Africa may have a difficult time bringing cryptocurrencies and CBDCs to places with insufficient energy for both mining and transfers.
The CAR and the Republic of Chad have the lowest percentages of the population having access to electricity, at just 12% and 12%, respectively, according to World Bank data from 2020.