Reserve Bank of Zimbabwe (RBZ) Governor, John Mangudya says the Bank’s intention to introduce Zimbabwe’s own central bank digital currency (CBDC) is at an advanced stage. The idea of a central bank digital currency was initially brought to light in 2021's monetary policy statement.
The digital currency phenomenon is not new to Zimbabweans who are currently using Real Time Gross Settlement (RTGS) and mobile money platforms like Ecocash, Telecash and OneMoney for payments. However, these platforms don’t actually move value but only send messages. A digital currency in tokenised form will move value across and make payments more efficient.
In the latest monetary policy statement (MPS) released on 11 August 2022, Mangudya said since 2021, the Bank has conducted study tours to countries that are advanced in CBDC endeavours and have developed a roadmap for the adoption of CBDC in Zimbabwe.
The Bank said a public consultation paper on CBDC is set to be released sooner and the public will have 90 days from the date of release to submit their comments. However, the exact date has not been given.
“The role of stakeholders in the CBDC journey is paramount and in that regard, the Bank has developed a public consultation paper on CBDC to be released soon,” Mangudya said in a statement accompanying the MPS.
“The consultation paper is aimed at fostering a broad and transparent public dialogue regarding the potential benefits and risks of CBDC and the public will have a period of 90 days from the date of release to submit their comments to the Bank.”
In addition to the consultation paper, Mangudya said the Bank shall carry out consumer perception surveys on CBDC.
Mangudya said the findings of both the consultation paper and consumer survey will enable the Bank to engage in pilot programmes related to CBDC.
With Zimbabwe targeting a digital economy by 2025, the introduction of CBDC will be a large footprint for the concept. Adopting digital currency will be another milestone achieved in digitalisation.
The latest report by World Bank’s Digital Economy for Africa held in 2021 revealed that Zimbabwe has a relatively well-developed digital payment system, where 96% of all transactions in the country’s formal sector are conducted through digital means and only 4% are cash-based, and the government uses digital money almost exclusively.
There are many benefits to the adoption of CBDC for Zimbabwe that cannot be denied. With the country battling inflation, currency instability and scarcity of cash, CBDC may come to the rescue. CBDC reduces dependence on cash, which among other things reduces the cost of printing and distributing the cash.
However, the digital currency will only hold value given that there is free-market price discovery, economic policy stability and proper management of electronic money supply growth.
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