The Central African Regional Bank wants to create a common CBDC digital currency for its member countries.
The board of directors of the Central African Regional Bank, or Banque des États de l'Afrique Centrale (BEAC), is urging banks in the region to create a common CBDC digital currency, which will allow them to modernize their payment structures and promote financial inclusion at the regional level, reported Bloomberg.
The use of digital currencies, such as CBDCs, can significantly reduce costs and increase the performance of existing payment systems in the region, which has become one of the most emerging markets for the crypto industry.
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CBDCs as a response to financial inclusion problems
Algorand senior economist Andrea Civelli published a report in May 2021 detailing how a blockchain-based CBDC system (Central Bank Digital Currency) could promote and positively impact inclusion, innovation and economic performance.
Civelli explained that the biggest obstacle to financial inclusion is the absence of a bank account. However, a system CBDC has the ability to promote inclusion, by improving the conditions of unbanked people.
The expert also noted that CBDCs have the potential to Optimize existing systems and achieve significant cost reductions in financial services for end users.
Regarding innovation, Civelli pointed out that CBDC digital currencies will allow banks and financial institutions to innovate more quickly, by being able to create more efficient, transparent and accessible financial services for all.
This will also enable institutions to boost economic growth and ensure the well-being of nations, he said.
Challenges and challenges of digital currencies
While CBDCs can bring great benefits to banking institutions, Civelli also pointed out some of the challenges that their adoption may entail.
First, he mentioned the need to create a solid infrastructure for digital identity and the obligation of central banks to solve this problem, with the aim of expanding economic and financial inclusion through digital currencies.
BEAC could be the first regional bank in Africa to issue a CBDC
The Central African Regional Bank (BEAC) is the central bank serving the Economic and Monetary Community of Central Africa (CEMAC). Countries such as the Central African Republic, Chad, Cameroon, Equatorial Guinea, Gabon and the Republic of the Congo are members of this organization.
Currently, several of the countries that make up the BEAC are interested in exploring the potential of CBDCs, while the Central African Republic, which is also part of Central Africa, has adopted Bitcoin as legal tender last quarter and is creating its own digital currency project, called Sango Coin.
For its part, the Republic of Congo was present at the bankers meeting and financial authorities organized by the Alliance for Financial Inclusion (AFI) in El Salvador in mid-May.
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