Namibia continues its retail CBDC project despite IMF skepticism, focusing on financial inclusion and cross-border payments. The Bank of Namibia is in the preparation phase, evaluating public acceptance and potential risks, while collaborating with regional banks. Although the IMF discouraged CBDC pursuits, Namibia remains optimistic about leveraging digital currency to improve services.
Namibia is advancing its retail Central Bank Digital Currency (CBDC) project, despite skepticism from the International Monetary Fund (IMF). The IMF has urged the country to consider alternative digital finance options. The Bank of Namibia (BoN) has identified the preparation phase of the digital Namibian dollar project, which aims to enhance financial inclusion and support cross-border payments.
BoN’s Director for International Relations, Kazembire Zemburuka, indicated that the bank is assessing public acceptance of both retail and wholesale CBDCs. The analysis includes potential challenges, risks, and preferred features of a digital currency. While the central bank collaborates with several stakeholders, including the IMF itself, the latter had advised against proceeding further based on its findings from a January study.
According to the IMF’s report, there is a lack of strong support for the issuance of a retail CBDC in addressing existing payment gaps, recommending caution before further technological exploration. The IMF emphasized the need for policies that would facilitate easier access to financial services in Namibia.
Acknowledging limitations in infrastructure and financial literacy, Zemburuka maintains that a digital currency could still enhance financial services in the country. He asserted that, despite integration challenges with existing systems, BoN considers CBDC a valuable option, committed to mitigating macro-financial risks.
In addition to the IMF, BoN is collaborating with regional central banks, including the South African Reserve Bank and the Bank of Lesotho, prioritizing cross-border CBDC payments. Namibia’s initiative aligns with other African nations exploring digital currencies to advance financial inclusion, such as Ghana, which anticipates launching its digital currency this year, and Nigeria, which has already introduced the eNaira.
In summary, despite the IMF’s reservations, Namibia is progressing with its CBDC project to foster financial inclusion and improve cross-border payments. The Bank of Namibia is actively assessing public sentiment regarding digital currencies while acknowledging the broader financial infrastructure challenges. Collaborations with regional banks and a commitment to addressing financial risks suggest an ongoing dedication to implementing a successful digital currency strategy.
Original Source: coingeek.com
