Rwandan authorities aim to implement a national Central Bank Digital Currency (CBDC) within the next two years, positioning the country at the forefront of financial innovation.
Rwanda, June 3, 2024 – The National Bank of Rwanda (BNR) disclosed its intention to introduce a Central Bank Digital Currency (CBDC) within the next two years, as part of Rwanda’s strategic endeavors to modernize its financial infrastructure and assert its significance in the evolving global economic landscape.
The envisioned CBDC, as elucidated by BNR’s Deputy Governor Soraya Hakuziyaremenye, aims to furnish Rwandan citizens with a secure, cost-effective, and user-friendly alternative to traditional cash transactions. Furthermore, it pledges to advance financial inclusivity by facilitating the participation of unbanked sectors in the formal economy.
With digital currencies gaining traction globally, the adoption of a CBDC is anticipated to facilitate smoother international trade for both governmental bodies and private enterprises.
However, while the potential benefits of a CBDC are apparent, its practical implementation remains an enigma for many Rwandans, mirroring sentiments across the globe.
In an exclusive interview with The New Times, Soraya Hakuziyaremenye delved into the intricacies of Rwanda’s CBDC initiative, shedding light on the meticulous steps requisite for its realization and the anticipated dividends for the populace.
Echoing the sentiments, Hakuziyaremenye underscored the significance of a comprehensive feasibility study conducted by the National Bank of Rwanda in collaboration with pertinent government ministries and stakeholders. This collaborative effort, initiated in 2022, not only assessed the technological viability of a CBDC but also scrutinized potential risks inherent in its deployment.
Hakuziyaremenye elucidated that the study identified four key opportunities envisaged with the adoption of a national digital currency, including bolstered payment system resilience, enhanced innovation and competition, accelerated progress towards a cashless society, and streamlined cross-border transactions.
Elaborating on the timeline and modalities for CBDC introduction, Hakuziyaremenye iterated a cautious approach, emphasizing the necessity for meticulous deliberation and extensive consultation with stakeholders. She emphasized the paramount importance of public feedback in shaping the final blueprint for Rwanda’s CBDC, highlighting concerns surrounding data privacy, system resilience, and financial stability.
Addressing the query on CBDC design, Hakuziyaremenye disclosed Rwanda’s preference for a retail CBDC model, envisaging seamless integration with existing banking infrastructure while ensuring widespread accessibility, even in offline settings.
Regarding public response, Hakuziyaremenye noted a blend of optimism and apprehension, with stakeholders lauding the potential for accelerated financial inclusion while expressing reservations concerning data security and operational intricacies.
Emphasizing Rwanda’s proactive stance in embracing financial technology, Hakuziyaremenye underscored the pivotal role of initiatives like the NBR fintech sandbox in fostering innovation and collaboration between emerging fintech startups and established financial institutions.
Conclusion
While acknowledging the impatience surrounding the delayed East Africa Community (EAC) single currency initiative, Hakuziyaremenye urged patience, citing the complexity of requisite prerequisites and the precedence set by international counterparts such as the European Union in achieving monetary integration.
As Rwanda navigates the digital currency landscape, meticulous planning, stakeholder engagement, and adaptability emerge as the linchpins for a seamless transition towards a digitized financial ecosystem, poised to redefine Rwanda’s economic trajectory on the global stage.
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