Rwanda’s central bank is investigating the possibility of issuing a digital currency to boost economic growth.
A Bloomberg report yesterday stated that the country is planning to learn from the experiences of other nations which are conducting similar explorations. For example, Sweden’s Riksbank is considering issuing a digital version of the Krona, known as e-krona, to cope with a dramatic decline in cash transactions. Singapore’s central bank has also conducted experiments with its Canadian counterpart to test the efficiency of cross-border payments using distributed ledger technology (DLT).
Researchers at the Carnegie Mellon University in Rwanda published a paper earlier this year touting the benefits of a digital currency in the local economy. “Adopting a national cryptocurrency in Rwanda could improve its online transactions and evolve related technology innovation…Rwanda could leverage a national cryptocurrency to promote easy trading with other African countries,” they wrote. Rwanda has ambitions to become the Silicon Valley of Africa.
Financial Stability Director-General Peace Masozera Uwase sounded a note of caution in his conversation with Bloomberg. “There are still concerns about how exactly you convert the entire currency into digital form, how to distribute that and how fast can you process those transactions,” he said. “Challenges come in, if technology is down how do you deal with such issues? We will join in once we are ready.”