Rwanda is aiming to launch its own national Central Bank Digital Currency (CBDC) within the next two years, said Soraya Hakuziyaremye, the Deputy Governor at Rwanda’s Central Bank.
This initiative is part of the country’s broader efforts to modernize its financial system and establish itself as a significant participant in the evolving global economy.
According to the National Bank of Rwanda (NBR), a national digital currency would provide citizens with a secure, cost-effective, and convenient alternative to physical cash. Additionally, it aims to enhance financial inclusion by allowing more of the unbanked population to engage in the formal economy.
Moreover, as digital currencies enter wider global use, it would enable the government and private companies to participate in international trade more seamlessly.
“We know now that close to 11 countries have issued CBDCs. The first one was the Bahamas, and we have a number of countries in Africa, including Nigeria, Ghana, and South Africa that are either in the piloting phase or issued their CBDC,” said the Deputy Governor.
“With Rwanda positioning as an ICT hub, with the ambition to become a cashless economy, and an international financial hub, we needed to understand whether there would be benefits for Rwanda as well to embark on that technological journey.”
Since 2022, the bank has conducted a feasibility study for CBDC implementation and launched a public consultation seeking views from the public about a Central Bank Digital Currency (CBDC) in May 2024.
According to the Deputy Governor, there exist multiple opportunities for a national digital currency in Rwanda:
“We identified four that we wanted to test. The first one is that a CBDC would be more resilient to the current payment systems and would actually sort of be a better payment tool in case of disasters.
The CBDC would also boost innovation and competition among payment system providers, as well as an accelerator to the cashless agenda that our country has embarked on. Equally beneficial is a CBDC that would improve cross-border payments.”
According to the Deputy Governor of the Central Bank of Rwanda, a CBDC would have the following benefits in the Rwandan context:
- Enhanced resilience in comparison to existing payment systems
- Boost innovation and competition
- Accelerate the digital economy and cashless agenda
- Faster and cheaper cross-border payments and remittances
Following the public consultation, which continues until end of June 2024, the bank says it will embark on a proof-of-concept to validate the use cases identified during the research phase and demonstrate if the risks identified can be mitigated.
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