Stakeholders have backed the Reserve Bank of Malawi (RBM) move to intensify research towards introduction of the digital currency.
It follows the RBM’s advertisement which seeks consultancy services for facilitation of research, development and experimentation of Central Bank Digital Currency in Malawi (CBDC).
Reads the document: “The Bank wishes to notify all prospective bidders that it has extended the bidding period for request for proposal for engagement of a consultant to facilitate the development and experimentation of CBDC) in Malawi through proof of concept.
In an interview, RBM spokesperson Mark Lungu said this is part of research and exploration to find out more about the CBDCs and align the bank with the global trends while stressing that it is not a process of introducing it.
Lungu said. “We are not introducing the CBDC, but as you know, most central banks are researching more about them so we didn’t want to be left behind. The said consultants are going to lead us in exploration.”
In a separate interview, Bankers Association of Malawi chief executive officer Lyness Nkungula said the initiative is part of a strategy to modernize the financial system, enhance financial inclusion and increase efficiency.
“By providing a digital currency, we can reach the unbanked and underbanked populations, offering them access to financial services while digital currencies can streamline payment systems, reducing transaction costs and improving the speed of transactions,” Nkungula said.
Apart from these, she believes CBDC can enhance the security of transactions and reduce the risks associated with cash handling and also allows for better tracking and prevention of illicit activities.
In an interview, Information Communication Technology expert Bram Fudzulani described the approach as a move in the right direction saying would it would hasten financial inclusion and the digital economy.
“I believe the CBDC will be implemented in a decentralized ledger because what we have observed is that the digital currencies are implemented, a manner to solve the last mike problem and in Malawi’s case the problem is charges in mobile money transfers,” Fudzulani said.
Fudzulani has since highlighted that the positive aspects with digital currency in the country is that it could eliminate or significantly reduce charges for electronic funds transfers.
Meanwhile finance expert Brian kampanje said digital currency is widely used across the globe as a medium of exchange and it’s addition could also bring strong regulations and combat financial crimes.
“Alot of people have been swindled in Malawi by fraudsters due to lack of regulations. RBM will put appropriate regulations to protect the general public and the economy. Zimbabwe already uses the Digital Currency and that reduces cost of handling the cash,” Kampanje said.
