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GOVERNOR AFFIRMS CBE’S COMMITMENT TO DIGITAL CURRENCY

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MBABANE – The Governor of the Central Bank of Eswatini (CBE) Dr Phil Mnisi affirmed CBE’s commitment to exploring Central Bank Digital Currency (CBDC).

This was during the 44th Ordinary Meeting of the Assembly of Governors at the 2022 Symposium of the Association of African Central Banks (AACB) in Banjul, Gambia.
The governor took part as a panellist in the event. With over 30 African central bank governors and their delegates in attendance, the panel discussions were expository on regional issues with both the Eastern African Community (EAC) and Economic Community of Western Africa States (ECOWAS) highlighting their intent on issuing regional currencies and presented CBDCs as a useful technology to achieve their currency objectives.

Significant

In ECOWAS, both the Bank of Nigeria and Bank of Ghana have made significant progress in their issuing CBDCs, with the launch of the eNaira in October 2021 and roll-out of the eCedi pilot steadily progressing in Ghana since May 2022. Keynote speakers of the event included Mamadou Dioulde Barry, Resident African Representative, International Monetary Fund (IMF) who highlighted a 22 per cent growth of the use of digital money in the continent from 2014-2022 along with opening remarks by Malangu Kabedi Mbuyi, Chairperson of the AACB, Governor, Banque Centrale du Congo.

In broaching the subject statement for his panel’s discussion, ‘Are Central Bank Digital Currencies an effective alternative to the Development of Unregulated Cryptocurrencies’, the Governor of the Central Bank of Eswatini’s remarks included previous sentiments ventilated by joint panellist Professor. Florens D. A. M. Luoga, Governor, Bank of Tanzania who emphasised the importance of focusing central banks resources in exploring the development of an interoperable regional (Eastern African) Digital currency as means of deepening financial inclusion and enhancing cross border payments in opposed to developing a CBDC in isolation from its neighboring countries, notably, Kenya and Uganda, Burundi, and Republic of Rwanda.

All countries of which were described to have shown a significant decline in the use of traditional Banking services and a stark increase in e-money services accordingly to previous expert, Richard Ketley, Director of Genesis Analytics. In addressing the central question of whether or not CBDCs were an effective alternative to unregulated cryptocurrencies, Mnisi contrasted cryptocurrencies salient properties that had gained them such popularity with the benefits of CBDC for a central bank in the fulfilment of its mandate.

Cryptocurrency

“It was ‘cryptocurrency’s instability and volatility that is considered the key factor of its failure to perform the store of value function attribute of money which, by contrast, presents a CBDC, by its design, as a better alternative to cryptocurrency, especially where financial stability and monetary policy is concerned,” he said. Mnisi added that this was due to CBDC, being a digital fiat currency, legal tender and capable of achieving all three conceptual uses of money; as means of exchange, as a measure of value and as a store value.

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