The Bank of Central African States is set to launch a central bank digital currency (CBDC). This bank serves several regions, including Cameroon, Chad, Equatorial Guinea, Republic of Congo, Central African Republic and Gabon.
The Bank of Central African States is about to launch a CBDC
The Bank of Central African States, also known as the Bank of African States, is set to have a CBDC after the approval of this product by the bank’s board of directors. A report released Friday by Bloomberg said the council sent an email urging the regional banking institution to launch a digital currency to modernize existing payment systems and support financial inclusion.
The Central African Republic (CAR) is one of the countries represented by this regional bank. In April this year, the country passed legislation supporting the use of Bitcoin as legal tender. However, the country has yet to make any plans to launch a CBDC.
After the country adopted Bitcoin as legal tender, the president, Faustin-Archange Touadera, said the country would work on a crypto project known as Sango. The project includes a crypto hub and an economic zone within the metaverse.
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Africa has been ranked among the fastest growing digital asset regions in the world. A report published earlier this year indicated that cryptocurrency transactions increased by 2,670% year-over-year in several countries such as Dakar, Core d’Ivoire and Senegal.
The Bank of Central African States has criticized the Central African Republic for approving Bitcoin as legal tender. The institution said that this decision could create problems and affect the monetary union of the Central African region.
CBDC plans in Africa
As private cryptocurrencies become popular in Africa, CBDC plans are also picking up. The Central Bank of Nigeria was among the first regions to announce its intention to roll out a CBDC known as eNaira. CBDC’s development journey began in October 2021.
The Reserve Bank of South Africa is also evaluating possible use cases for a CBDC as part of the Project Khokha initiative. However, countries located in Sub-Saharan Africa could face issues with their cryptocurrency and CBDC plans due to limited access to electricity needed for mining and transfers.
Data released by the World Bank in 2020 indicated that the Central African Republic and Chad had the lowest access to electricity. This could hamper the growth of the digital asset industry which relies heavily on electricity.
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