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Zambia Investigates Creating Its Own Digital Currency After Crypto Bashing

Zambia’s central bank is reportedly researching its own digital currency in hopes of cutting transaction costs and boosting participation. “The results of the survey will be part of input into policy considerations about whether to introduce a central bank digital currency in Zambia,” officials quoted by Bloomberg revealed. Central bank digital currencies (CBDC) are digital tokens linked to a country’s currency and managed by the central bank. Officials hope the CBDC can expand the number of people with access to financial services while improving the traceability, efficiency and security of payment systems. Zambia’s Central Monetary Authority expects the results of the survey to come in in the fourth quarter of 2022. CBDCs vs Bitcoin Unlike cryptocurrencies like Bitcoin, CBDCs are linked to a particular fiat currency. That’s why they probably won’t experience that much in terms of price volatility. Earlier this month, the Bank of Zambia even warned of the potential risks associated with handling digital assets. “People who want to trade in them should have a clear understanding of all the risks associated with such payment and investment instruments.” On the other hand, CBDCs face criticism for centralization. Unlike Bitcoin, a CBDC will likely be under the complete control of one party: the central bank. This is where China’s bid to launch a digital yuan has met significant resistance from other monetary participants. CBDC’s Developing Countries Zambia may soon join countries like China, Thailand, Malaysia, Nigeria and others that have launched or tested their own digital currencies. Developing countries are at the forefront of payments innovation. This is because many of their citizens have limited access to traditional banking services. For that reason, mobile money transfer services such as the Kenyan M-Pesa disrupt payment systems in these countries. Similar services based on blockchain technology could also take its fair share of the pie. For example, Bitcoin’s Lightning Network is popular in certain places in El Salvador and is gaining popularity in other populated areas. SPECIAL OFFER (Sponsored) Binance Free $100 (Exclusive): Use this link to register and get $100 Free and 10% Off Fees on Binance Futures First Month (Terms and Conditions). PrimeXBT Special Offer: Use this link to register and enter POTATO50 code to receive up to $7,000 on your deposits.
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