According to the Bank of Zambia, it plans to finish its studies to assess the feasibility of creating a Central Bank Digital Currency (CBDC) before the end of this quarter in 2022.
Financial Exclusion Gap Reduction
A research study to examine the potential benefits of creating a digital currency central bank (CBDC) has been announced by the Zambian central banking. It is expected that it will complete this in Q4-2022. After weighing all the benefits and drawbacks of the creation of a digital currency (CBDC), the bank says that the results of the study will allow it to decide whether it is beneficial to go ahead with the launch of the CBDC.
Bloomberg reports that the Bank of Zambia wants to create a digital currency, similar to other African peers. This is because they believe it can reduce the gap in financial inclusion and transaction costs. However, before launching the CBDC, the central bank said it needs to understand the study’s findings.
“The results of the research will form part of the input in the policy considerations on whether to introduce a central bank digital currency in Zambia,” explained Nkatya Kabwe, the central bank’s acting director of communications.
Cryptos Not Legal Tender
The report stated that CBDCs could increase citizen participation in formal economic activities. They also have the potential to enhance transaction traceability. They’re also likely to enhance the safety and efficiency of payment systems.
A report claiming that the Zambian central banks is planning to finish its investigation into CBDCs by the end of this year, comes just days after the bank reportedly stated that cryptocurrencies were not legal tender. It added that “people who want to deal in them should have a clear understanding of all the risks that come with such payment and investment instruments.”
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