Namibia considers digital currency

… Common Monetary Area meet to discuss idea

Centtral bank governors from the Common Monetary Area (CMA) are considering the possibility of introducing central bank digital currencies (CBDCs).

The CMA covers Namibia, South Africa, Eswathini and Lesotho.

The meeting was hosted by Bank of Namibia (BoN) governor Johannes !Gawaxab yesterday.

CBDCs are digital forms of fiat currency issued by a country’s central bank.

They are similar to cryptocurrencies, but their value is fixed by the central bank and is equivalent to the country’s fiat currency.

BoN spokesperson Kazembire Zemburuka said the meeting covered a range of economic topics such as crisis management and updates on deposit insurance schemes.

“The agenda also included a look into CBDCs and evaluating their potential and implications for the region,” said Zemburuka.

Currently, the Bahamas (sand dollar), Eastern Caribbean Central Bank (d-cash), Nigeria (e-naira), Jamaica (Jam-dex), China (digital renminbi), India (digital rupee) and Russia (digital ruble) have digital currencies.

The governors’ key focus of the meeting was the integration of cross-border payment systems.

According to Zemburuka, they looked at ways to make cross-border payments seamless.

“The governors emphasised the need for equitable and inclusive access that ensures that all stakeholders benefit from seamless cross-border payment capabilities,” said Zemburuka.

They also looked for ways to match regulatory frameworks that are streamlined to balance efficiency and integrity.

According to the CMA’s cross-border payments oversight committee position paper, ‘Processing of Cross-Border Low-Value Electronic Funds’, the new system aims to enhance the efficiency, speed and security of cross-border payments within the CMA.

“By 1 April 2027, all cross-border low-value electronic fund transfers (EFTs) within the CMA must be processed through a retail payment system designated for cross-border EFTs, such as the transactions cleared on an immediate basis (TCIB) system, which can be repurposed by banks as they may require,” says the paper.

Last Monday, First National Bank became the first financial institution in the country to introduce an enhanced cross-border payment solution.

The bank will utilise BankservAfrica’s TCIB solution.

Moreover, the central banks are looking at collaborations with international development partners such as the International Monetary Fund and the World Bank for technical assistance and support to address persistent payment system challenges.