Kingdom

Bank

The Central Bank of Eswatini (CBE), alongside Giesecke+Devrient, has unveiled a design document outlining the features of its prospective digital currency, the digital lilangeni.
According to the CBE, the <a href="https://www.centralbank.org.sz/wp-content/uploads/2021/04/2024-Fintech-Digital-Lilangeni-Design-Paper.pdf" rel="noopener noreferrer nofollow" target="_blank">digital lilangeni </a>will help promote the digitalization of the domestic economy, catalyze innovation and new business opportunities, and deepen financial inclusion in the Kingdom of Eswatini.
<h3 id="span-style-font-weight-400-the-new-eswatini-cbdc-will-run-on-a-distributed-database-span">The new Eswatini CBDC will run on a distributed database</h3>
Although the Kingdom of Eswatini is mainly cash-based, the CBE views the new digital lilangeni as a possible complementary to banknotes and coins, especially after phasing out checks as an official means of payment in 2022.
Eswatini is also planning to roll out its new digital currency as a tokenized retail CBDC running on a distributed database overseen and operated by the CBE instead of employing a distributed ledger system.&nbsp;
According to the CBE, they will operate the token’s core infrastructure, while intermediaries will handle token distribution to end users. Moreover, the CBE will be the sole entity responsible for minting and redeeming the digital currency.
The bank will also implement two types of wallets: the hosted wallet and the hardware wallet. Hosted wallets will require internet access to function, while hardware wallets could work in offline environments.
The digital lilangeni will also be pegged to the South African Rand and allow for pseudo-anonymity, maintaining the privacy of its users while meeting all Know Your Customer and Anti-Money Laundering requirements. Additionally, all lilangeni payments will be programmable at the wallet level, allowing users to control children’s spending and enable automated transactions.
<h3 id="span-style-font-weight-400-eswatini-adds-to-the-short-list-of-african-crypto-accepting-countries-span">Eswatini adds to the short list of African crypto-accepting countries</h3>
Eswatini’s strides to implement a new digital currency contrast with those of many African counterparts who’ve taken a negative stance towards crypto. Countries like Egypt, Morocco, and Algeria have already banned crypto trade, considering digital assets risky investments. 
Nigeria also barred financial institutions from accepting crypto transactions. The Central Bank of Nigeria then justified its decision, tying crypto to money laundering and terrorism financing risks.
Some countries, such as Kenya, South Africa, Uganda, Tanzania, Ghana, and Tunisia, have taken a more softer approach, cautioning investors over the risks of crypto only. Thus, they have allowed crypto engagements and trading in their countries.
The new Eswatini CBDC design and infrastructure are comparable to Rwanda’s proposed digital currency. Both, if launched, would run on a distributed database.
While launching CBDCs will be a big step for these countries, some analysts like <a href="https://mpra.ub.uni-muenchen.de/120966/1/MPRA_paper_120966.pdf" rel="noopener noreferrer nofollow" target="_blank">Killingland and Dahl</a> have warned that developing countries should refrain from issuing them due to their weaker financial institutions and lower financial stability compared to developed nations.

Eswatini unveils digital lilangeni CBDC to boost trade and financial inclusion

Table of Contents

Cryptopolitan_News

Other articles published on Oct 11, 2024

VanEck Expands into Venture Capital with $30M Fund for Fintech, Blockchain, and AI

BNB Chain Launchpad GraFun Shatters Records with First Week $250M in Volume

Crypto Losses in 2024 Soar to $2.11 Billion, Surpassing 2023’s Annual Total: Report

Trump’s World Liberty Financial to Raise $300M via New Token Sale

Bitnomial takes SEC to court for classifying XRP futures as securities

Is It Too Late To Buy SILLY? Silly Dragon Price Soars 33% And This Might Be The Next Crypto To Ex...

Join our free newsletter for daily crypto updates!