In this article published by the Charles Telfair Centre, our team at International Economics Consulting Ltd, explores the benefits, challenges, and considerations of Central Bank Digital Currencies (CBDCs) implementation in Africa.
CBDCs can significantly reduce transaction costs, including cross-border payment fees, and stimulate trade between African countries. They offer a stable and regulated alternative to cryptocurrencies and can facilitate faster and more efficient transactions. CBDCs also have the potential to enhance financial inclusion, as they can integrate the informal sector into the formal economy. Nonetheless, challenges such as disintermediation and cybersecurity risks exist but these can be mitigated through robust legal and regulatory frameworks.
As African countries, including Mauritius, consider implementing CBDCs, necessary reforms and infrastructure upgrades need to be considered. The article emphasises the importance of engaging with private banking institutions and conducting outreach activities to build confidence in the adoption of CBDCs. With the future of digital currencies in Africa promising increased trade and regional integration, understanding the potential benefits and challenges of CBDCs is crucial.
Read the full article to stay informed and gain valuable insights about the future of digital currencies in Africa.