Bank of Namibia to Continue Digital Dollar Research Despite IMF Objections
Date: 2025-03-12 Author: Gabriel Deangelo Categories: BUSINESS
The deputy governor of the central bank said that the project is in the preparatory stage, and the main goal is to analyze how the population will perceive the retail version of the central bank digital currency (CBDC), and businesses - the wholesale version. Potential risks and problems of implementation are also being studied. It is important to understand what functions people expect from the digital currency and how much demand there will be for it.
According to a representative of the Bank of Namibia, various stakeholders are involved in the process, including the International Monetary Fund (IMF). However, after conducting its own study, the IMF expressed doubts about the need to launch a CBDC and suggested focusing on the development of alternative instant payment systems (IPS). The fund's experts did not see significant advantages of the digital currency over existing financial instruments.
Nevertheless, the Bank of Namibia continues to adhere to its position. While the CBDC will not solve all of the country’s financial problems, its implementation could improve accessibility of banking services and financial literacy among the population. Despite the difficulties with integrating the digital dollar into the NamPay and IPS systems, the Central Bank considers it a promising tool for digital transactions. At the same time, the regulator takes into account macroeconomic risks, including liquidity, interest rates, and foreign exchange reserves. According to the IMF, six African central banks in the sub-Saharan region are planning to introduce their own digital currencies by 2028. They are currently testing them as part of special regulatory programs.
