Commonwealth central bank governors brainstorm on digital currencies

LAGOS, Nigeria – Governors of Central Banks in the Commonwealth regions have shared experience on individual efforts in the development of Central Bank Digital Currency, CBDC during their annual meeting.

The Commonwealth Central Bank Governors explored ‘Financial Technology for Inclusive Recovery’ and particularly the use of Central Bank Digital Currencies, a new technology they believe could give the most vulnerable in societies around the world better access to financial services.

Speaking at the opening of today’s virtual Commonwealth Central Bank Governors Meeting, Commonwealth Secretary-General, the Rt Hon Patricia Scotland QC said as Commonwealth countries strive to rebuild our economies after COVID-19 we have an important opportunity to lay the foundation to create a resilient and inclusive future – one which helps to address the multiple challenges of climate change, poverty and income inequality.

According to her technology has helped which has helped countries weather these challenging times can help with recovery.

“FinTech can support the inclusion of the most vulnerable, such as those without access to bank accounts and lending. However, for FinTech to adequately support inclusive recovery, there needs to be a regulatory environment that supports its growth and development,”

Commonwealth Small States have led on the use of Central Bank Digital Currencies (CBCDs), with the Bahamas being the first country in the world to launch a CBDC, the Sand Dollar, in October 2020.

She said the growth of CBCD’s is an issue of growing importance across the Commonwealth and the world. “Of the 54 Commonwealth countries, 26 have announced intentions to either research, develop, pilot or launch CBDCs. A 2020 survey of central banks found that 86 per cent were engaged in investigating CBDCs”, she  said adding that  in the first four months of 2021, Bermuda, Jamaica and the UK announced they were exploring launching a CBDC.

“The Eastern Caribbean Central Bank (ECCB) in April 2021 became the first to launch a CBDC across multiple countries. Nigeria is piloting the CBDC – eNaira – in the last quarter of 2021. Whilst Singapore, Malaysia, South Africa and Australia are all involved in a pilot project in cross border CBDC transactions”, she said.

During today’s meeting, Commonwealth Central Bank Governors shared their experiences and lessons learned from implementing CBDCs in their regions. The Bahamas, Ghana, Sri Lanka and Cyprus presented their progress toward developing CBDCs. They expressed a need for better financial literacy, capacity building of citizens and support for small businesses, particularly on how to utilise technology to cope with crises.

To help bolster capacity development for fintech professionals in Commonwealth governments, the Commonwealth Secretariat has partnered with the Universities of Oxford and Cambridge to fund the participation of member states on fintech courses. To date, 120 officials from 43 Commonwealth countries across all 5 Commonwealth regions have participated in the Commonwealth Fintech Training Programme.

The Secretariat has also developed the Commonwealth Fintech Toolkit to help Commonwealth countries to identify which policy interventions may make sense regarding Fintech and how to implement these decisions.

The Commonwealth Central Bank Governors Meeting comes ahead of the Commonwealth Finance Ministers Meeting which will be held virtually tomorrow and will focus on Supporting Economic Recovery in the Commonwealth.