The Bank of Central African States is set to launch a central bank digital currency (CBDC). This bank serves several regions, including Cameroon, Chad, Equatorial Guinea, the Republic of Congo, the Central African Republic, and Gabon.
Bank of Central African States set to launch a CBDC
The Bank of Central African States, also known as Banque des Etats de l’Afrique, is close to having a CBDC after the approval of this product by the bank’s board. A report published on Friday by Bloomberg said that the board had sent an email urging the regional banking institution to launch a digital currency to modernize the existing payment systems and support financial inclusion.
The Central African Republic (CAR) is one of the countries represented by this regional bank. In April this year, the country passed legislation that supported the use of Bitcoin as legal tender. However, the country has yet to make plans for launching a CBDC.
After the country adopted Bitcoin as legal tender, the President, Faustin-Archange Touadera, said that the country would be working on a crypto project known as Sango. The project includes a crypto hub and an economic zone within the metaverse.
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Africa has been ranked as one of the fastest-growing digital asset regions globally. A report released earlier this year said that cryptocurrency transactions had increased by 2670% year-over-year in several countries such as Dakar, Core d’Ivoire, and Senegal.
The Bank of Central African States criticized the Central African Republic for endorsing Bitcoin as legal tender. The institution said that the move could create problems and affect the monetary union of the Central African region.
CBDC plans in Africa
While private cryptocurrencies are becoming popular in Africa, CBDC plans are also picking up. The central bank of Nigeria was among the first regions that announced plans to roll out a CBDC known as the eNaira. The CBDC development journey started in October 2021.
South Africa’s Reserve Bank is also assessing the possible use cases of a CBDC through the Project Khokha initiative. However, countries situated in Sub-Saharan Africa could face problems with their cryptocurrency and CBDC plans because of the limited access to the electricity needed for mining and transfers.
Data published by the World Bank in 2020 said that the Central African Republic and Chad had the lowest access to electricity. This could hamper the growth of the digital asset sector that largely relies on electricity.
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