Africa: Board urges Bank of Central African States to introduce common digital currency

The Bank of Central African States, or Banque des États de l’Afrique, which serves Cameroon, the Central African Republic, Chad, Equatorial Guinea, Gabon, and the Republic of the Congo, could be closer to releasing a central bank digital currency reportedly at the urging of its board.

According to a Friday report from Bloomberg, the board sent an email calling for the regional bank to introduce a digital currency in an effort to modernize payment structures and promote regional financial inclusion. The Central African Republic, or CAR, passed legislation adopting Bitcoin (BTC) as legal tender in the country in April, but has not recognized a central bank digital currency, or CBDC.

Nigeria’s central bank was one of the first in the region to launch a CBDC called the eNaira in October 2021, while South Africa’s Reserve Bank continues to explore possible use of a CBDC through its Project Khokha initiative. The Bank of Central African States also criticized Nigeria accepting BTC as legal tender, calling the move “problematic” and something that could have a “substantial negative impact” on the monetary union of Central Africa.

Sub-Saharan African nations could face significant challenges introducing cryptocurrencies and CBDCs to areas with limited access to electricity, both for transfers and mining. According to 2020 data from the World Bank, the CAR and Chad both rank among the lowest percentages of the population with access to electricity, at 15.5% and 11.1%, respectively.

Following its adoption of Bitcoin, CAR President Faustin-Archange Touadéra announced in June that the country would be adopting a crypto initiative called the Sango project, which included a “legal crypto hub” and special economic zone in the metaverse. Africa remains one of the fastest growing digital asset markets in the world, it was noted that crypto transactions had increased by up to 2,670% year-over-year in Côte d’Ivoire, Senegal, and Dakar.