With the aim to launch its own cryptocurrency in the future, the Central Bank of Rwanda is studying the crypto-technology.
Governments in the world are becoming increasingly aware of the impact that blockchain technology and cryptocurrencies are generating on the world. In this way, they have concentrated efforts to form work groups that help research and innovate with this new tool that is changing many processes in global finance, and in many other sectors of the economy.
Other countries had remained aloof from this technology due to ignorance or distrust. However, after Facebook’s announcement about the launch of its cryptocurrency, Libra, many nations have been forced to make changes to their policies and to establish groups of experts in the area to help them understand blockchain and digital currencies. This, in order to establish a legal framework that regulates its use in the country so cryptocurrencies would be established as an asset that can also be used by the government.
In the middle of the changes are the nations that have already had a direct approach to cryptocurrencies and allow their use in the country, or even have launched their own official cryptocurrency. This is the case of Japan with its set of laws that regulate the use of cryptocurrencies or Venezuela with its Petro, this is, the country’s official cryptocurrency. But, despite the advantages that cryptocurrencies may represent, they can often lose control of certain monetary policies.
For this reason, according to information from local media, Rwanda could launch its own cryptocurrency in the future. The cryptoactive would be protected by the country’s Central Bank.
Due to official reports from The Royal Bank of Canada (RBC), Nederlandsche Bank (DNB), and the monetary authority of Singapore, The National Bank of Rwanda (BNR) would be using its data to base its research on the possible uses and potentials of cryptocurrencies and apply them to the economy of the African country.
About the issues that could present some inconvenience within Rwanda’s economy, Masozera Uwase, who is Director of Economic Stability at BNR, explained that the exchange of physical money to digital money could be a real challenge in Rwanda. “There is still concern about how exactly you convert all physical money into digital money, how you distribute it, and how fast you can process those transactions”.
The Rwandan financial authorities have conducted large information campaigns about the possible risks that citizens might face when using cryptocurrencies. They say citizens could be immersed in fraudulent negotiations without knowledge or suffer online scams. For this reason, it is not yet expected that, in the short term, a Rwandan digital currency can be launched.
Regarding these risks, Uwase argued that “there are challenges in this. If technology fails, how do you face the challenges this brings? We will enter the moment we feel ready”.
Although they are not yet prepared for trust at all in the crypto-technology, the interest of poor governments such as Rwanda to solve their country’s financial problems using blockchain technology is a great recognition of the digital currency industry.
By María Rodríguez