Last week the Central Bank of Kenya hosted a meeting of the Sub-Saharan Africa consultative group of the Financial Stability Board (FSB). Several of the 13 central banks represented at the conference are working on or have launched central bank digital currencies (CBDC). But the topic of discussion was not domestic CBDC usage but how to leverage CBDC for cross border payments. Improving the efficiency of cross border payments is an important FSB initiative.
“The group discussed initiatives to enhance cross-border payments in the region, including potential use of central bank digital currencies for cross-border payments while noting the importance of compliance with anti-money laundering and combating the financing of terrorism (AML-CFT) standards,” said an FSB statement.
However, the meeting was not convened purely to discuss CBDC.
Of the countries present, the Reserve Bank of South Africa is the one that has publicly participated in a cross border CBDC initiative, Project Dunbar with the central banks of Singapore, Malaysia and Australia. Most of South Africa’s other CBDC research has focused on wholesale or interbank use of CBDC.
Africa progresses CBDC
Several of the African banks present at the meeting are advancing retail CBDC initiatives. Nigeria is live with its eNaira, Ghana selected a technology partner for its eCedi pilot last year, Kenya ran a public consultation earlier this year, and Uganda is seriously considering it.
Apart from the five nations mentioned, the central banks present for the meeting included Angola, Botswana, Mauritius, Namibia, Tanzania, Zambia, Central Bank of West African States (BCEAO) and the Bank of Central African States (BEAC). The central banks of Burundi, South Sudan, Congo, and Rwanda were also present as guests.
Meanwhile, the number of cross border CBDC initiatives continues to expand. Project MBridge involving the central banks of Hong Kong, Thailand, China and UAE, is the most advanced. Sweden, Norway and Israel are exploring how a retail CBDC could be used cross border in Project Icebreaker. Others include a project between Singapore and the New York Federal Reserve, Project Mariana involving the central banks of France, Switzerland and Singapore, and Project Jura between France and Switzerland.