Zambia is also considering the idea of adopting its own CBDC

Zambia is also considering the idea of adopting its own CBDC

The Bank of Zambia aims to cut transaction costs and increase citizen participation in the formal financial system, Bloomberg said. The news came shortly after the central bank issued a warning on the use of cryptocurrencies, saying that “people who want to deal with them should have a clear understanding of all the risks that come with such payment and investment instruments”.
This will have a strong echo of central bank rhetoric in Zambia’s southern neighbor, 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 Nigeria to review the CBDC experience that was launched in October.

About 100 countries are studying the possibilities of developing a CBDC, IMF chief executive Kristalina Georgieva said in a speech today. The motivation is partly due to concern that demand for their fiat currencies will decrease if citizens were to use CBDCs from other countries or, indeed, a private cryptocurrency. Developing country nations with often unstable fiat currencies are more prone to this risk than most others, hence the widespread interest in CBDC development.