Namibia is progressing with its retail central bank digital currency project despite the IMF’s skepticism. The Bank of Namibia is assessing public interest and potential challenges related to the digital Namibian dollar, which aims to improve financial inclusion and cross-border payments. The IMF has recommended a cautious approach regarding the CBDC’s development. Namibia collaborates with neighboring banks to enhance regional payments.
Namibia continues to advance its retail central bank digital currency (CBDC) initiative despite skepticism expressed by the International Monetary Fund (IMF). The Bank of Namibia (BoN) announced it is currently in the “preparation phase” for the digital Namibian dollar, with a primary focus on enhancing financial inclusion and streamlining cross-border transactions.
Kazembire Zemburuka, the BoN’s director for international relations, indicated that the bank is assessing public reception towards both retail and wholesale CBDCs. It is also examining potential challenges and risks, as well as the features that citizens desire in a future digital currency, as reported by local media.
The BoN maintains collaboration with numerous stakeholders, including the IMF; however, a study by the IMF earlier this year did not find substantial support for the issuance of a retail CBDC. The IMF advised restraint on further technological exploration until clearer benefits of CBDC for payments could be established.
Zemburuka acknowledged that while a digital dollar alone cannot address all of Namibia’s financial obstacles, such as inadequate infrastructure and low financial literacy, it can still enhance financial services. He stated that despite complexities, including integration challenges with existing payment systems, the BoN remains committed to providing a useful digital payment alternative and mitigating macro-financial risks.
Beyond its relationship with the IMF, the BoN is also collaborating with neighboring central banks, such as the South African Reserve Bank and the Bank of Lesotho, prioritizing cross-border CBDC payments. Meanwhile, Namibia’s efforts align with other African nations exploring digital currencies as a means to promote financial inclusion. Notable examples include Ghana, which is set to launch its digital cedi, and Nigeria, which introduced its eNaira, although it experienced initial challenges in acceptance.
In conclusion, Namibia’s determination to pursue its digital currency project signals its commitment to enhancing financial inclusion and optimizing payment systems. Despite IMF’s reservations, the Bank of Namibia believes in the potential of a CBDC to address some financial service shortcomings. The collaboration with regional central banks highlights a broader trend in Africa towards adopting digital currencies, with the aim of meeting the unique financial needs of the population.
Original Source: coingeek.com
