The Bank of Central African States (also BAEC) has been encouraged by its board members to introduce a common digital currency for the six nations, including Cameroon, Gabon, Chad, the Republic of Congo, Equatorial Guinea, and the Central African Republic.
Bloomberg reports that the regional central bank’s board made the call in an emailed statement signed by its head, Herve Ndoba, following a meeting they held in Douala, Cameroon.
If the move is implemented, the nations collectively known as the Economic and Monetary Community of Central Africa (CEMAC) will become the first to introduce a regional digital currency, while BAEC will be the first regional bank to issue a central bank digital currency (CBDC), according to the report.
The board says the CBDC will modernize payment structures and promote regional financial inclusion. At present, the BAEC does not recognize digital currencies. It reiterated this in a comment directed at the Central African Republic (CAR), which adopted BTC as legal tender back in May.
The bank said that CAR’s move is “incompatible with the agreements and conventions governing the Central African Monetary Union and the Statutes of the Bank of Central African States.”
The regional bank has clamped down hard on CAR since May. BAEC introduced regulations that would prevent lenders in the region from partnering with payment platforms that transact in digital currencies or recognizing them as currencies.
Like the BAEC, the Banking Commission of Central Africa (COBAC), which oversees commercial bank activities among CEMAC members, also opposed CAR’s making of BTC legal tender citing financial stability concerns.
However, the regulations and opposition have not discouraged the war-torn and impoverished country from launching its official digital currency Sango Coin. The CBDC is part of CAR’s extensive plans to become a digital assets hub in Africa.
Central Banks working on CBDCs continue to increase
The BAEC is not the only central bank working on a CBDC. After Nigeria became the first country to issue a CBDC with the launch of its e-Naira last year, several more African countries joined the race.
CBDCs have also caught on outside Africa. According to a BIS study, nine out of every ten central banks are actively working on their CBDC projects. The BIS itself is involved in testing cross-border use cases for many of these projects.
Another regional organization that is considering a CBDC is the European Union. The ECB has been brainstorming and carrying out consultations on the digital euro.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
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