Showing posts with label CBDC. Show all posts
Showing posts with label CBDC. Show all posts

Zimbabwe is researching CBDC as opposed to cryptocurrency, Bitcoin, or any other kind of derivatives.

Africa has recently been the focus of interest in terms of cryptocurrency adoption. Zimbabwe, on the other hand, has been pondering the different possibilities with cryptocurrency as interest and use cases have grown in the country. With many anticipating that Zimbabwe will follow El Salvador's lead, the administration took a moment to emphasize that it had no plans to make cryptocurrency legal tender.


According to sources, Monica Mutsvangwa, the Minister of Information, Publicity, and Broadcasting Services, stated that cryptocurrencies will not be a local currency, adding, 

"The government wishes to reassure the people that it is not considering bringing a new currency into the economy, as certain sectors of the media have claimed." The Zimbabwe dollar is our native money, not cryptocurrency."

She went on to say,

"Like most governments throughout the world, the Government of Zimbabwe is researching Central Banking Digital Currency as opposed to cryptocurrencies, Bitcoins, or any other kind of derivatives through its Financial Technology Group."


For the whole crypto community, volatility has been a big source of anxiety. As a result, the Zimbabwean government was opposed to making it legal tender. Mthuli Ncube, the Minister of Finance and Economic Development, had previously stressed the rising popularity of cryptocurrency among young people. He had also stated that it would not be accepted as a form of payment in Zimbabwe.

Despite this, Ncube noted that the government is considering it as a new asset class. In fact, the Treasure found nothing wrong with investigating the potential utility of crypto as an asset class. He went on to say, however, that because of its volatility, it can't be utilized as a transactional currency.

According to Ncube,

"The plan is to use it as an investment asset class rather than a transaction currency, and even then, after we've made a choice, we'll ring-fence it in an offshore financial center so it doesn't circulate locally."

Over the last year, crypto has witnessed enormous growth throughout Africa. As a result, most countries are considering either regulating or prohibiting it. According to the Chainalysis analysis, the African crypto market rose by 1,200 percent between July 2020 and June 2021, with Kenya, South Africa, Nigeria, and Tanzania having the greatest penetration. Nigeria has already outlawed cryptocurrency transactions through regulated banks, while others are pondering their options.

Share:

CBDC and worldwide crypto standards are recommended by the IMF for financial stability.

The IMF's new rules are aimed at reducing the financial risks associated with global crypto adoption. To maintain financial stability despite worldwide crypto growth, the International Monetary Fund (IMF) published a set of rules for emerging markets and developing countries.

The IMF thinks that crypto assets have the potential to be used as a vehicle for quicker and cheaper cross-border payments, noting the significant rise in the value of crypto markets since May 2021, despite negative tendencies. High returns, transaction prices and speed, and decreased Anti-Money Laundering (AML) requirements are the main drivers for crypto adoption, according to the study.

To address the financial stability issues that have arisen as a consequence of increasing crypto asset trade, the IMF advises that:


“By addressing data gaps, policymakers could establish worldwide standards for crypto assets and improve their capacity to monitor the crypto industry. When confronted with cryptoization concerns, emerging countries should improve their macroeconomic policies and explore the advantages of issuing central bank digital currencies.”


According to the IMF study, the crypto industry has grown beyond Bitcoin (BTC), with a significant rise in stablecoin offers. The IMF also advises “proportionate regulation to the risk and in line with those of global stablecoins” in addition to central bank digital currency (CDBC) issue. De-dollarization measures, in addition to the CBDC, will aid governments in addressing macro-financial concerns.

Payments will become simpler, quicker, cheaper, and more accessible, and will traverse borders quickly, according to an earlier IMF study highlighting the advantages of digital assets. These enhancements may boost efficiency and inclusiveness, which would be beneficial to everyone.”

The IMF had also scheduled to meet with Salvadoran President Nayib Bukele to explore the consequences and prospects of Bitcoin acceptance in the mainstream.

Share:

Hot Topic

Elon Musk was told by Jack Dorsey that Twitter should include a "Like Signal" protocol.

Elon Musk wonders over possible variations of the social network in a string of text messages. Former CEO and co-founder of the birdsite Jac...

counter, at the bottom of the page, in a table, div or under a menu.