Integrated Report 2022/23 at Happy Vally Hotel.
By Nokunceda Magagula
The Central Bank of Eswatini (CBE) is currently in the process of examining the potential implementation of a digital Lilangeni as an additional currency alternative.
This was disclosed by CBE Governor Dr. Phil Mnisi during the 2022/23 Annual Integrated Report Presentation held at Happy Valley Hotel on Monday. Dr Mnisi provided insights into fintech developments for the year 2022/2023, with a significant focus on the Central Bank Digital Currency (CBDC) project.
Notably, in September 2022, the CBE established a partnership with the globally acclaimed technology group Giesecke+Devrient (G+D) to delve into the potential development of a CBDC.
Dr Mnisi explained that G+D’s involvement in the project followed the completion of the initial phase of the CBDC Diagnostic Study, which identified retail CBDC as the most promising avenue for the adoption of digital currency in Eswatini. Furthermore, he emphasized the ongoing efforts to investigate the issuance of a Digital Lilangeni, which would complement traditional cash transactions.
This endeavour encompasses a comprehensive exploration of use cases and design concepts for a potential digital currency in Eswatini. Key areas of focus include governance, accessibility, interoperability, security, and programmability, all while assessing the potential impact on monetary policy.
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A pivotal lesson learned during the Eswatini CBDC project has been the critical importance of tailoring solutions to the local context.
Dr Mnisi underscored the necessity of understanding the specific needs, preferences, and existing payment methods within the Eswatini market to ensure the successful implementation of the CBDC.
Additionally, he highlighted the significance of prioritizing user experience and addressing customer pain points. High fees and sluggish transaction speeds emerged as significant challenges for users during the project. Consequently, designing the CBDC to deliver a seamless and efficient user experience, with minimized fees and transaction times, is of paramount importance.
Another vital lesson gleaned from the project is the need for early and consistent engagement with key stakeholders. Dr Mnisi stressed the importance of involving stakeholders from diverse sectors, including financial institutions, merchants, and consumers, throughout the project’s duration.
This proactive engagement serves to consider their perspectives and concerns, foster trust, gather valuable feedback, and address any potential challenges or resistance to adoption.
The Central Bank of Eswatini remains committed to exploring the potential of a digital Lilangeni and advancing the development of a Central Bank Digital Currency.
Their partnership with Giesecke+Devrient and the invaluable lessons learned from the Eswatini CBDC project are shaping a future where digital currency coexists seamlessly with traditional cash, delivering a user-friendly and efficient financial ecosystem for the people of Eswatini.
