- The BEAC could be planning on launching a CBDC
- BEAC’s board of directors urges the bank to introduce a CBDC in its francophone member states
- BEAC urged to consider increasing financial inclusivity on its new CDBC
The bank of Central African States (BEAC) could be working on introducing a central bank digital currency (CBDC) for its member states.
In July 2022, the BEAC board of directors held several meetings in Douala, Cameroon. It was after the meetings that the quest for a CBDC came about.
The member states from the regional Bank for the Economic and Monetary Community of Central Africa (CEMAC) were also part of the meeting.
The board of directors also requested that BEAC consider increasing the region’s financial inclusion as it explores the CBDC.
What is the need for a CBDC?
The BEAC’s six francophone member countries are to leverage the CBDC for some potentially important benefits.
These countries, including Cameroon, Gabon, The Republic of Congo, Equatorial Guinea and The Central African Republic could use the CBDC to circulate welfare payments, especially during times of crisis such as natural disasters or pandemics.
The CBDC should help the intended countries to manage their monetary policies, provide a currency and pilot their exchange rates.
The digital currency should also help control the foreign reserves and ease the payment and settlement systems.
CBDCs in Africa
The central bank digital currency and stablecoins seem to overthrow the fiat currency, especially in African states. These two forms of currencies could succeed the fiat currency as a form of payment in the pan-African region.
In 2021, Nigeria introduced its CBDC, e-Naira, the first CBDC to be launched in Africa.
The e-Naira was extensively adopted as the Central Bank of Nigeria recorded a total of 37,810 transactions within a month after the launch. This translated to approximately NGN 208.91 million in transactions.
Nigeria’s e-Naira spurred interest from other African countries. For instance, the South African Reserve Bank of South Africa was recently working on a wholesale CBDC. The CBDC will be used by financial institutions to facilitate interbank transfers.
The Bank of Ghana also trolls on a CBDC. The bank was testing the retail usage of a CBDC, e-Cedi. Netizens from Ghana who own a digital wallet app or contactless smart cards can use the e-Cedi.
BEAC against cryptocurrencies
The Central African Republic also stands out in offering a digital currency to its citizens. The CAR, which is also a member state of the BEAC, introduced its national cryptocurrency, the Sangocoin. Sangocoin will majorly be used in the country’s long-term crypto project, Sango Island.
CAR aims to leverage Sangocoin to bring about transformation in its financial system.
The bank of Central African states, however, discourages CAR’s crypto adoption. In May 2022, the BEAC asked CAR to nullify the legalization of Bitcoin as legal tender.
The BEAC claimed bitcoin could outdo the country’s currency, the Central African Franc (CFA).
