According to a Bloomberg Wednesday report, Zambia, like other surrounding nations, is researching a possible CBDC.
Bank of Zambia on CBDCs
According to Bloomberg, the Bank of Zambia wants to reduce transaction costs and enhance people engagement in the formal financial system.
According to Bloomberg, the announcement comes after the central bank issued a warning against the usage of cryptocurrencies, stating that “those who wish to trade in them should have a thorough grasp of all the dangers that come with such payment and investment instruments.”
This is eerily similar to the rhetoric of Zambia’s southern neighbor, Zimbabwe’s central bank. In December, Reserve Bank of Zimbabwe Governor John Mangudya remarked, “As a central bank, we don’t believe in cryptocurrencies.” Zimbabwe is also looking towards creating a CBDC and aims to send a team to Nigeria to learn from their experience, which was started in October.
In a speech today, International Monetary Fund (IMF) Managing Director Kristalina Georgieva revealed that over 100 nations are looking into the possibility of creating a CBDC.
The motive stems in part from a fear that people may abandon their fiat currencies if they utilize CBDCs from other nations or even a private cryptocurrency. Developing countries, with their sometimes unstable fiat currencies, are more vulnerable to this danger than others, which explains the considerable interest in CBDC development.