The Kingdom of Eswatini is considering the introduction of a central bank digital currency (CBDC) and joins the growing list of African countries exploring the viability of an e-currency.
The Central Bank of Eswatini (CBE) said it has appointed the 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 includes 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 about whether or not to adopt the e-currency and the best ways to roll it out.
The project follows the completion of the first phase of a 2020 CBDC diagnostic study by the CBE, which presented “the strongest and immediate opportunity for the adoption of a digital currency in Eswatini.”
“The Central Bank of Eswatini is pleased to have engaged G+D as a technical advisor to accompany us on our journey as we explore and formulate the fundamental policy considerations and use cases of a localized CBDC. We are convinced that G+D’s technological expertise and their strong regional presence on our continent will enable us to realize all the possible benefits of a Digital Lilangeni and ensure that we are fully equipped to support a CBDC in the future issue,” said CBE Governor, Dr. Phil Mnisi.
G+D recently helped Ghana test a retail CBDC, making it the second country after Nigeria to conduct such a trial. Nigeria’s eNaira was launched last October and had been used to transact in August 2022 worth 4 billion ($9.2 million). Kenya, Namibia, Tanzania, Uganda and Zambia are some of the other African countries that are eyeing digital currencies to improve their access to financial services, cost reductions, interoperability and improved cross-border payments.
Unlike cryptocurrencies such as Bitcoin and Ethereum, the CBDCs are developed by central banks and are linked to countries’ fiat currencies.