Zambia's Central Bank to Explore CBDC Following Crypto Warning: Report

The Bank of Zambia wants to cut transaction costs and increase citizens' participation in the formal financial system.

AccessTimeIconFeb 9, 2022 at 3:42 p.m. UTC
Updated Feb 9, 2022 at 5:16 p.m. UTC

Jamie Crawley is a CoinDesk news reporter based in London.

Zambia, in common with several neighboring countries, is exploring a potential central bank digital currency (CBDC) and expects to complete its research later this year, according to a Bloomberg report Wednesday.

The Bank of Zambia aims to cut transaction costs and increase citizens' participation in the formal financial system, Bloomberg said.

The news follows shortly after the central bank issued a warning on the use of cryptocurrencies, saying “people who want to deal in them should have a clear understanding of all the risks that come with such payment and investment instruments,” according to Bloomberg.

This strongly echoes the rhetoric of the central bank in Zambia's neighbor to the south, Zimbabwe. "As a central bank we don't believe in cryptocurrencies," Reserve Bank of Zimbabwe Governor John Mangudya said in December. Zimbabwe is also exploring the development of a CBDC and plans to send a team to research the experience of Nigeria, where one was launched in October.

Some 100 countries are researching the possibilities of developing a CBDC, International Monetary Fund (IMF) Managing Director Kristalina Georgieva said in a speech today.

The motivation is in part out of concern that they will see demand for their fiat currencies drop should citizens use CBDCs from other countries or, indeed, a private cryptocurrency. Developing nations with often unstable fiat currencies are more prone to this risk than most, hence the widespread interest in developing CBDCs.




Read more about

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Jamie Crawley is a CoinDesk news reporter based in London.

CoinDesk - Unknown

Jamie Crawley is a CoinDesk news reporter based in London.

Trending

1
CoinDesk - Unknown
Three Arrows Capital Files for Bankruptcy in New York Tied to British Virgin Islands Proceeding

A British Virgin Islands court ordered Three Arrows' BVI branch into liquidation earlier this week.

CoinDesk - Unknown
2
CoinDesk - Unknown
Cosmos-Builder Ignite Cuts Headcount by More Than 50%, Ex-Employees Say

The reductions come amid a crypto market crash, and after the return of Ignite’s controversial ex-CEO.

CoinDesk - Unknown
3
CoinDesk - Unknown
India's Day Of Reckoning With ‘Most Controversial Crypto Tax’ Is Here

The country's 1% TDS is predicted to exacerbate negative market sentiment and add to the woes of the crypto community.

CoinDesk - Unknown