Namibia is proceeding with its CBDC project, despite IMF skepticism urging alternative options. The Bank of Namibia is in the preparation phase, focusing on financial inclusion and cross-border payments. Investigations into public acceptance and necessary features are ongoing, and partnerships with various stakeholders are forming as the nation aligns itself with broader regional digital currency initiatives.
Namibia is advancing its retail central bank digital currency (CBDC) initiative despite skepticism expressed by the International Monetary Fund (IMF). The IMF has advised Namibia to consider alternative digital finance options; however, the Bank of Namibia (BoN) remains in the preparation phase of the digital Namibian dollar project aimed at enhancing financial inclusion and cross-border payments.
Kazembire Zemburuka, BoN’s director for international relations, reported that the bank is investigating Namibians’ willingness to adopt retail and wholesale CBDCs, along with assessing potential challenges and preferred features of a digital currency. Partnerships with various stakeholders, including the IMF, are being pursued to further this initiative.
The IMF’s recent report, following a study in January, advised against the issuance of a retail CBDC, citing a lack of strong support for such an endeavor to fill payment gaps. The report emphasized the importance of identifying tangible benefits of CBDCs before progressing beyond initial conceptual phases.
Despite these concerns, Zemburuka emphasizes that a digital dollar could contribute positively to financial services in Namibia, acknowledging that it cannot resolve existing issues such as inadequate infrastructure and low financial literacy. He asserted that the BoN is committed to addressing macro-financial risks associated with the introduction of a CBDC.
In addition to collaborating with the IMF, the BoN is working with neighboring central banks, including the South African Reserve Bank and the Bank of Lesotho, to prioritize cross-border CBDC payments. Namibia is part of a broader trend in Africa, where other nations, such as Ghana and Nigeria, are exploring or have introduced their own digital currencies while learning from previous challenges faced by early adopters.
In conclusion, Namibia’s unwavering commitment to the advancement of its CBDC project, amidst IMF criticisms, highlights its focus on financial inclusion and improved payment systems. By partnering with various stakeholders, including regional central banks, Namibia seeks to enhance its financial landscape and provide efficient services to its citizens. The experiences of other African nations will serve as valuable lessons as Namibia navigates this evolving digital finance terrain.
Original Source: coingeek.com
