The National Bank of Rwanda (BNR) has announced that it is opening its feasibility study for the implementation of a central bank digital currency (CBDC) for public comment.

This initiative is part of the Rwandan government’s efforts towards a completely cashless economy and the strengthening of the country’s financial infrastructure.

Cost reduction and improvement of payment system efficiency

The BNR study suggests that the introduction of a CBDC would not only improve the efficiency of the payment system, but also contribute to a reduction in costs related to managing physical money. With a forecasted spend of $35 million on money management over the next five years, the bank sees significant benefits in the move to digital currencies.

The BNR proposes to create an interest-free, token-based CBDC that would be compatible with all existing payment systems within Rwanda, and potentially with other CBDCs worldwide. The emphasis is also on the use of advanced technologies such as Bluetooth and Near Field Communication (NFC), allowing users to transfer their digital money offline, even without a smartphone.

‘Open programmability’ of digital currencies

Furthermore, the study highlights the “open programmability” of the digital currency, which would facilitate innovative services and products. Although this raises questions about privacy and security, the BNR expects that the benefits will prevail.

Despite technological advances, popular acceptance of a CBDC remains an issue, partly due to challenges such as low financial literacy and an extensive informal economy. The BNR recognizes that reducing cash can be an effective way to formalize more economic activities.

Finally, the study also examines the potential impact of user fees and limits on CBDC holdings, although these aspects remain to be further elaborated. Using tools such as the World Economic Forum’s CBDC Policy-Maker Toolkit, Rwanda is aiming for a safe and efficient implementation of its digital currency project.


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