Zimbabwe draws on Nigeria lessons in crypto currency plans

Zimbabwe is drawing lessons from Nigeria as it pursues plans for its own central bank digital currency and won’t be deterred by lackluster interest shown in that country.

The slow uptake of the eNaira, Africa’s first CBDC, is unlikely to sway Zimbabwe’s decision-making, according to Innocent Matshe, deputy governor of the southern African nation’s Reserve Bank. Preparations remain in place to introduce a digital currency despite the jury being “still out” on the concept, he said.

“Certainly it’s a point to consider that there is hesitancy in the market,” he said Tuesday in an interview at a conference near Port Louis, Mauritius. “We don’t think that it is a deterrent at this point, we just think that it is a learning point for us. We can then adopt measures to try and mitigate the factors that are causing that hesitancy in the Nigerian market.”

Less than 0.5% of Nigerians transact in the nation’s digital money. That’s prompted the central bank to seek new ways to boost interest, including offering discounts to drivers and passengers of three-wheeler taxis to use the eNaira.

Zimbabwe has had its own currency woes. The local dollar has lost more than 80% of its value against the greenback this year and the government tried a series of measures to contain an even steeper decline on the parallel market that stoked rampant inflation. The US dollar is widely used in the country as an alternative.

The government sent teams to visit several central banks around the world to study their plans for CBDCs, including Ghana and China, Matshe said.

“It will have its own specificities,” he said. “We are not expecting that it will be directly linked to any currency, we are keeping all our options open.”

© 2022 Bloomberg

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