Rwanda is planning to launch its own Central Bank Digital Currency (CBDC) within the next two years, aiming to provide a safe, free, and convenient alternative to physical cash. This initiative, led by the National Bank of Rwanda (BNR), is expected to enhance financial inclusion and integrate more unbanked individuals into the formal economy.
Soraya Hakuziyaremye, Deputy Governor of Rwanda’s Central Bank, has revealed a 2026 timeline for the rollout of the Rwandan CBDC. The move is inspired by similar initiatives in other African countries like Nigeria, Ghana, and South Africa.
The development of a national CBDC is part of Rwanda’s broader ambitions for ICT development and a transition to a cashless economy. Recognizing the advancements of major trading partners in digital currency, Rwanda aims to assess the potential benefits of adopting a CBDC through a detailed feasibility study.
In May 2024, the Rwandan government initiated a feasibility study to explore the benefits, risks, and practicalities of implementing a retail CBDC. The study, led by the BNR in collaboration with the Ministry of Finance, ICT, and Innovation, has identified multiple opportunities for the adoption of a national digital currency. The authorities also published a research paper and conducted a public consultation process to gather feedback and address concerns regarding data privacy, resilience, and financial stability.
Following the public consultation process, which is expected to conclude in the next four weeks, Rwanda will embark on a proof of concept to test the technology, design, and speed on a small scale. Additionally, a six-month international test for cross-border payments will be conducted. Individuals and companies will be selected to participate in testing the digital currency.
Rwanda is considering various CBDC design options, with a preference for a retail CBDC distributed through banks. The country is also exploring the development of an offline-accessible CBDC to cater to areas with limited internet access or during power outages.
Significance:
The introduction of a CBDC is expected to provide numerous advantages:
- Financial Inclusion: Enabling more unbanked individuals to participate in the formal economy.
- Convenience: Offering a digital alternative to physical cash.
- Economic Integration: Aligning with Rwanda’s goals for ICT advancement and a cashless society.
- Global Competitiveness: Keeping pace with global developments in digital currency technology.
Rwanda’s plan to develop and implement a national CBDC by 2026 signifies a significant step towards embracing digital finance and fostering economic inclusivity. As the feasibility study progresses and public consultations are completed, Rwanda is poised to join other forward-thinking nations in the digital currency arena.
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