The Kingdom of Eswatini is considering the introduction of a central bank digital currency (CBDC), joining the growing list of African countries exploring the viability of electronic money.
The Central Bank of Eswatini (CBE) has announced that it has appointed German technology group Giesecke+Devrient (G+D) to research and explore the possibilities of a digital Lilangeni (the country’s currency) to complement banknotes.
The CBDC project will involve a design concept and other considerations such as governance, accessibility, interoperability, security, and programmability of the potential digital currency. The consultants are expected to help the CBE make an informed decision on whether or not to adopt e-money and the best ways to deploy it.
The project follows the completion of the first phase of a 2020 CBDC diagnostic study by the CBE, which “presented the strongest and most direct opportunity for digital currency adoption in Eswatini” .
“The Central Bank of Eswatini is delighted to have engaged G+D as a technical consultant to accompany us on our journey as we explore and articulate the fundamental policy considerations and use cases for a localized CBDC. We are confident that G+D’s technology expertise and strong regional presence on our continent will allow us to realize all the possible benefits of a Digital Lilangeni and ensure that we are fully equipped to issue a CBDC in the future” said CBE Governor Dr Phil Mnisi.
G+D recently helped Ghana pilot a retail CBDC, making it the second country after Nigeria to conduct such a trial. Nigeria’s eNaira was introduced in October last year and had been used by August 2022 to conduct transactions worth £4 billion ($9.2 million). Kenya, Namibia, Tanzania, Uganda and Zambia are among other African countries considering digital currencies to improve their access to financial services, cost reductions, interoperability and improved cross-border payments.
CBDCs, unlike cryptocurrencies like Bitcoin and Ethereum, are developed by central banks and pegged to countries’ fiat currencies.
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