The National Bank of Rwanda (NBR) is evaluating the feasibility of the development and issuance of a central bank-backed digital currency.
According to an August 22 Bloomberg report, with its own digital currency, the central bank is attempting to make the processing of transactions more efficient and to boost economic growth.
The report also detailed that the Rwandan monetary regulator is closely studying the developments made by other central banks in countries like Canada, Singapore, and the Netherlands in the arena of blockchain technology.
Limitations of the technology in a centralized environment
Despite advancement towards the adoption of decentralized technology, the bank is still facing many roadblocks, especially with the design of the digital currency.
“There are still concerns about how exactly you convert the entire currency into digital form, how to distribute that and how fast can you process those transactions,” Peace Masozera Uwase, the director-general of the financial stability department at the NBR, said.
He also pointed out the limitations of the decade-old technology for its integration into the ecosystem of a central bank.
Did COVID-19 Save the Forex Industry?Go to article >>
“Challenges come in, if [the] technology is down how do you deal with such issues? We will join in once we are ready,” Uwase added.
Though the Rwandan central bank is now inclined to issue its own cryptocurrency, it is hostile against scams involving cryptocurrencies and issued a notice against them at the end of May.
— National Bank Rwanda (@CentralBankRw) May 30, 2019
Similar to the NBR, many central banks across the world are studying the feasibility of issuing a digital currency of their own. Earlier this month, a senior official of the Chinese central bank revealed that it is on its way to rolling out a central bank-backed cryptocurrency.