The Bank of Zambia aims to cut transaction costs and increase citizen participation in the formal financial system, Bloomberg said. The news came shortly after the central bank issued a warning on the use of cryptocurrencies, saying that "people who want to deal with them should have a clear understanding of all the risks that come with such payment and investment instruments".
This will have a strong echo of central bank rhetoric in Zambia's southern neighbor, Zimbabwe. "As a central bank we don't believe in cryptocurrencies," Reserve Bank of Zimbabwe Governor John Mangudya said in December. Zimbabwe is also exploring the development of a CBDC and plans to send a team to Nigeria to review the CBDC experience that was launched in October.
About 100 countries are studying the possibilities of developing a CBDC, IMF chief executive Kristalina Georgieva said in a speech today. The motivation is partly due to concern that demand for their fiat currencies will decrease if citizens were to use CBDCs from other countries or, indeed, a private cryptocurrency. Developing country nations with often unstable fiat currencies are more prone to this risk than most others, hence the widespread interest in CBDC development.