The Central Bank of Eswatini is looking into the development of a digital currency option with a little help from international technology group Giesecke+Devrient.
The partnership will research and explore the development of a Central Bank Digital Currency (CBDC) – an electronic form of money – for the Kingdom of Eswatini.
This appointment follows the completion of the first phase of the CBDC Diagnostic Study conducted in 2020, which found that a retail CBDC presented the strongest opportunity for the adoption of a digital currency in Eswatini.
With this agreement, the Central Bank of Eswatini (CBE) and G+D hope to advance CBDC research efforts to gain an in-depth understanding of the practicalities of implementing a CBDC in Eswatini.
CBE joins other central banks and regulators around the world that are exploring the potential of CBDCs to address challenges such as payment efficiency, interoperability, financial inclusion and payment system resilience.
While cash remains a dominant means of payment in the country, technology and the increasing demand for instant and fast payments are changing the way businesses and consumers transact. This is evident in the expanding role and uptake of digital payment channels.
To ensure that consumers continue to have access to legally backed central bank money, through the CBDC project the bank will investigate the possibility of issuing a digital version of the lilangeni (the monetary unit of Eswatini) as a complement to cash. This, it seems, will involve a design concept for a potential digital currency in Eswatini, including aspects of governance, accessibility, interoperability, security and programmability.