Zimbabwe has announced its intentions to join a host of countries that are already looking to launch their own central bank digital currencies (CBDCs) and ensure that they have a digital version of their fiat currency.
The CBDCs are red-hot at the moment, as far as the central banks are concerned. They are expected to serve a variety of purposes for the banks as they would block or reduce the usage of stablecoins as a payment method and thus reduce the proliferation of crypto into the financial ecosystem. They would also provide them with a mode of tracking all the financial transactions that happen within the system, as they are doing now and this would be very useful for them in the future as they can continue to regulate and control the flow of funds. And at the end of the day, they would also manage to solve the needs of the mainstream users who would ideally like to start using digital currencies so that they can benefit from all its advantages.
The central bank of Zimbabwe has made it clear that they have no idea of using any type of cryptocurrencies as legal tender within the country and are all set to follow the example of another African nation, Nigeria, which rolled out the e-Naira in October amid a lot of fanfare, The rollout has been slow, steady and smooth so far and though there have been some complaints of hacks and scams, they are expected to be resolved in due course of time and this is most likely to be used as a test case and pilot by the other countries who are looking to launch their CBDCs shortly.
The impact of these on the financial ecosystem is yet to be fully ascertained and this is what the central banks would be most concerned about, especially the bigger ones. This is something that they have not faced before in their lifetime and it also can have a lasting impact on the future of many countries. This makes it very important for it to be handled strongly and correctly and it remains to be seen how they will be able to handle that.