According to the deputy governor of the central bank in Rwanda, they will not know whether they can issue a central bank digital currency (CBDC) or not until the end of 2022. This is when they will complete a study that assesses the benefits and risks that are associated with it. Soraya Hakuziyaremya, the Rwandan central bank’s deputy governor, has recently suggested that they would first like to know the outcome of the investigation they are conducting on CBDCs before talking about its issuance. Hakuziyaremya said in her remarks that the finding of the research study that the National Bank of Rwanda (NBR) has undertaken will decide the fate of CBDC in the country.
She elaborated that they were currently in an investigation phase and were assessing the benefits a CBDC could have for the people of Rwanda. But, she also said that they would also consider its risks, not just for the economy, but also the sector itself, depending on the kind of digital currency they would issue. It had previously been reported that the Rwandan central bank had initiated a research study in June 2021, which was aimed at studying the possible implications a central bank digital currency could have on the financial and monetary stability of the country.
Furthermore, the report had also said that the report would also focus on the ‘operationalization model’. Launching the study made the NBR one of the handful of banks in Africa to highlight their intention of embracing digital currencies. However, up until now, it is only the Central Bank of Nigeria that has gone ahead and rolled out their digital currency. As for Rwanda, the deputy governor stated that if the country goes ahead with the launch of the CBDC, then it also needs to reduce the number of people who are financially excluded.
She said that looking at financial inclusion was of the utmost importance because issuing a digital currency means including all the population and not excluding anyone. Therefore, the introduction of the CBDC should also help in closing the digital divide and also ensure that people have the option of using it if they want. Rwanda Fintech Network’s chairperson, Olivier Mugabonake also talked about the potential opportunities that a CBDC could offer to the local economy in the report.
He said that there were already some companies that were ready to embrace the said technology. He said that he understood that the regulator has to make an assessment and ensure secure adoption. A number of countries all around the world are currently working on their own central bank digital currency (CBDC) projects. They have reached different stages so far, with China already testing its CBDC. The ECB is also doing its own investigation into the possible introduction of a digital euro, as is the Reserve Bank in India (RBI). Most central banks are in favor of launching a CBDC instead of regulating cryptocurrencies for widespread use, as the latter are considered unreliable.