Zimbabwe’s Central Bank Investigates CBDC and Stated its Opposition to Cryptocurrencies

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Key Takeaways:

  • Zimbabwe’s central bank announced yesterday that it is investigating the feasibility of launching its own digital currency (CBDC).
  • The bank also claimed that interest in its regulatory sandbox continues to grow.

Zimbabwe’s central bank, which has previously expressed its opposition to cryptocurrencies, announced yesterday that it is currently investigating the feasibility of launching its own central bank digital currency (CBDC).

In its most recent monetary policy statement, Zimbabwe’s central bank, the Reserve Bank of Zimbabwe (RBZ), reiterated its preference for a central bank digital currency (CBDC) over cryptocurrencies. According to the statement, it is currently “actively examining the viability of adopting a Zimbabwean CBDC, including specific design issues,” according to the statement.

The RBZ is already drafting a blueprint for its CBDC, according to a statement made by the bank’s governor, John Mangudya. The statement reads as follows:

“The Bank is laying out a clear path for CBDC adoption, which includes the current feasibility and assessment stage, policy formation based on the findings of the feasibility research, and implementation modalities.” says the statement.

The RBZ also announced that it would regularly offer reports on the CBDC program’s development.

The RBZ also mentioned its fintech regulatory sandbox in its monetary policy statement, which was introduced in March 2021. It has received “112 online registrations and a total of 31 applications in various stages.” According to the central bank, the software and systems development group alone accounts for 48% of “registered users.

The payments category has 18% of registered users, while banking and savings and deposits have 8% and 1%, respectively. The remainder comprises capital raising, investment management, lending, and other activities.

The sandbox is still available for innovation, according to the RBZ, and requirements for potential candidates can be found on the institution’s website.

The bank is actively exploring the feasibility of adopting a Zimbabwean CBDC, including specific design considerations, opportunities, and risks to the monetary and financial system, in response to the Government’s announcement in November 2021 on the country’s preference to introduce the central bank digital currency (CBDC) rather than cryptocurrencies.

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Chetna Prakash

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