Rwanda to Roll Out CBDC By 2026 After Consultations, Testing

2024-06-02 21:02:22

Shalini Nagarajan

Last updated:

June 3, 2024 01:02 EDT | 1 min read

East African nation Rwanda aims to create its own retail central bank digital currency (CBDC) to assert its significance in the global economy’s future landscape by 2026.

According to the National Bank of Rwanda, the CBDC would be a secure and convenient alternative to cash, potentially bringing more people into the banking .

The deputy governor of Rwanda’s central bank, Soraya Hakuziyaremenye, discussed plans for a digital currency and its advantages for citizens in a recent interview with The New Times.

She highlighted that several African nations, like Nigeria, Ghana, and South Africa, are already testing or launching their own digital currencies. She mentioned that Rwanda’s central bank has been collaborating with the finance ministry, and technology since 2022 to study these examples and explore a Rwandan CBDC.

Rwanda’s Central Bank Prioritizes Risk Assessment for CBDC

Their research highlighted the importance of understanding not just the technology involved, but also the potential risks of issuing a digital currency.

She explained that a CBDC would encourage competition and innovation within payment s, supporting Rwanda’s goal of a cashless economy. Additionally, it would streamline international transactions. The central bank plans to take a measured approach to the CBDC, requiring government approval before proceeding.

The official emphasized that public adoption is crucial for the CBDC’s success. The bank doesn’t want to launch a digital currency simply for the sake of it; it needs to offer clear advantages for Rwandan citizens.

Rwanda’s CBDC Pilot to Test Technology and Design in a Controlled Setting

Rwandans have four more weeks to participate in the public discussion about the CBDC. After that, the central bank will move forward with a pilot test to assess its feasibility.

“That will allow us to test the technology, the design, and the speed on a small scale,” the governor said. “But there is also an aspect of cases where we want to test the technology in other countries, particularly in cross-border payments, this exercise will roughly take six months.”

The pilot test will involve a select group of people and businesses using the CBDC. This will allow the central bank to uate the technology’s smoothness, resilience, and effectiveness in managing potential risks.

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