Namibia is proceeding with its CBDC project despite IMF skepticism. The Bank of Namibia is in the preparation phase, focusing on financial inclusion and cross-border payments. It seeks public input on CBDC features, while the IMF report cautioned against advancement without clear benefits. Collaborations with regional banks highlight Namibia’s commitment to enhancing its financial system through digital currencies.
Namibia continues to advance its retail central bank digital currency (CBDC) project, disregarding skepticism from the International Monetary Fund (IMF), which suggested the country explore alternative digital finance options. The Bank of Namibia (BoN)’s director for international relations, Kazembire Zemburuka, announced that the project is currently in the “preparation phase,” aimed at enhancing financial inclusion and cross-border payment systems.
BoN is assessing public interest in both retail and wholesale CBDCs, identifying potential challenges and risks, and determining desired features of a digital currency. Zemburuka elaborated on this survey of public opinion to media outlets, highlighting the bank’s intention to ensure public acceptance.
While BoN collaborates with various stakeholders, including the IMF, the latter advised against pursuing the digital currency following a study conducted in January. The IMF report indicated that there was insufficient support for the issuing of a retail CBDC and discouraged further technological exploration without evident benefits for payments.
The Bank of Namibia recognizes that while a digital currency cannot resolve all financial issues in the country, such as inadequate infrastructure and low financial literacy, it still plays a significant role in enhancing financial services for citizens. Zemburuka asserted that despite challenges like integrating CBDC into existing infrastructure, BoN views CBDC as a crucial digital payment solution.
Furthermore, BoN is collaborating with central banks from neighboring regions, including the South African Reserve Bank and the Bank of Lesotho, prioritizing cross-border CBDC payments as a key aspect of the project. Namibia aligns with other African nations pursuing digital currencies to improve financial inclusion, such as Ghana, which plans to launch its digital cedi, and Nigeria, which has already introduced the eNaira, despite challenges presented by the latter’s reception.
In conclusion, Namibia’s commitment to its CBDC project demonstrates a deliberate effort to enhance financial inclusion and improve payment systems, notwithstanding the caution advised by the International Monetary Fund. By investigating public interest and collaborating with regional partners, Namibia aims to establish a stable framework for digital currency adoption. This initiative positions Namibia within a broader movement across Africa, where various nations seek to introduce digital currencies to strengthen their financial ecosystems.
Original Source: coingeek.com
