Rwanda Announces Plans for Digital Currency by 2026.

Rwanda Central Bank Governor and Deputy.

In a significant stride towards financial innovation, the East African nation of Rwanda is poised to enter the realm of digital currencies, with plans to unveil its Central Bank Digital Currency (CBDC) by the fiscal year 2026. This bold step was announced by Soraya Hakuziyaremye, the Deputy Governor of the National Bank of Rwanda, signaling Rwanda’s intent to join the ranks of other African nations like Nigeria, Ghana, and South Africa, which are already charting their paths in CBDC adoption.

Hakuziyaremye emphasized that Rwanda’s decision stems from observing the experiences and initiatives of its key partners, many of whom are actively exploring or utilizing digital currencies. With Rwanda’s ambitious goals to transition into a fully digital society, embracing advancements in Information and Communication Technology (ICT), and fostering a cashless economy, the rationale behind assessing the feasibility of a CBDC becomes even more apparent.

The groundwork for Rwanda’s CBDC endeavor was laid out in the National Bank’s annual report for the 2022/2023 Fiscal Year, unveiled by Governor John Rwangombwa in November 2023. Building on this foundation, the government launched a pivotal pilot program for a retail CBDC in May 2024, marking a significant step forward in the country’s digital currency exploration. This pilot program, conducted through a comprehensive feasibility study, aims to meticulously analyze the potential benefits, drawbacks, and implementation strategies associated with retail CBDCs.

Rwanda Central Bank Governor, John Rwangombwa.

To navigate this complex terrain, the Deputy Governor, in collaboration with key ministries including Finance, ICT, and Innovation, spearheaded a task force entrusted with conducting in-depth research and analysis. This multifaceted investigation included soliciting public feedback on crucial issues such as data privacy and the resilience of the financial ecosystem, underscoring Rwanda’s commitment to inclusive decision-making processes.

As Rwanda embarks on the next phase of its CBDC journey, President’s speeches have hinted at plans to engage with the public in the coming weeks to gauge sentiment and gather insights. The forthcoming proof of concept phase will subject the CBDC to rigorous testing, evaluating its technological robustness, design efficacy, and transactional speed on a smaller scale. Subsequently, a six-month live testing phase for cross-border payments using digital currency will be initiated, initially targeting both individuals and businesses.

In parallel, Rwanda is meticulously exploring various CBDC design options, with a strong inclination towards a retail CBDC model facilitated through traditional banking channels. Additionally, the country is pioneering innovations such as an offline CBDC, designed to ensure currency accessibility in remote areas lacking connectivity or during instances of power outages, underscoring Rwanda’s commitment to inclusivity and resilience in its digital currency framework.

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