Bank of Mauritius plans to pilot CBDC in 2021
The Bank of Mauritius is targeting a year-end rollout for the island nation’s central bank digital currency (CBDC) pilot project, the central bank governor said on Wednesday.
Speaking at CoinDesk Consensus 2021, Governor Harvesh Seegolam said the Republic of Mauritius is in the process of finalizing its position papers on a CBDC and will publish “concrete examples” of its initiatives in the near future.
While discussions and initiatives surrounding CBDCs have been around for some time, China’s supercharged approach to deploying a national digital currency could end up accelerating the process around the world, the panelists said during of the discussion. The panel also included Greg Medcraft, Director of the Financial and Enterprise Affairs Directorate of the OECD and Loretta Joseph, FinTech Advisor to the Mauritius Financial Services Commission.
“The CBDCs will be there to fill in and fill the gaps that the traditional monetary system is unable to fill,” Seegolam said.
Central banks around the world have said they may be looking into the possibility of digitizing their fiat currencies, but concerns about compliance, security and privacy have also concerned central bankers and digital currency supporters as ‘They assess the advantages and possible pitfalls of banks establishing a direct financial relationship with their citizens.
“I believe in most countries it will be optional for a person to choose to actually use a CBDC,” Medcraft said. He added that there is a possibility that stablecoins and state-issued CBDCs will coexist in the future, giving privacy-conscious people another way to go digital with their fiat.
Seegolam added that the island nation had consulted the International Monetary Fund (IMF) on possible designs for its CBDC and that the world monetary body had helped Mauritius with its provisional digital currency plans.
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Noting that financial inclusion is also a priority when central banks consider issuing digital fiat, Seegolam added that the trilemma between compliance, security and privacy is central to central bankers’ minds when considering deploy a CBDC.
Medcraft said the core principles that central banks should take into account when thinking about the design of their CBDCs would be “cross-border functionality, making sure it meets the needs of the economy and inclusion. financial ”.
Seegolam said that while CBDCs have their advantages, they are unlikely to replace cash, but rather complement the existing monetary system.
CBDCs are getting serious
In a similar panel at the 2020 consensus conference, Lord Meghnaud Desai, chairman of the Official Forum of Monetary and Financial Institutions (OMFIF), noted that when issuing a CBDC, countries should consider whether Poorer People Prefer to Use Cash and How a Digital Currency Could Affect International Remittances.
At the time, Seegolam said its central bank was to get closer to a CBDC pilot, although few details are available.
“As central bankers, as governors, we talk regularly on a bilateral basis to also see what is the other use of the collaboration policy that you know we need to work on designing a lean system capable of. to talk to each other, ”Seegolam said Wednesday, adding that a common standard for CBDCs around the world will also be important as nations move forward on this journey.
“May the CBDCs be with you soon,” Medcraft said at the end of the panel, noting that the internet has taught us that the “walled garden” approach doesn’t necessarily work when it comes to technology.