The Central Bank of Liberia (CBL) Executive Governor, J. Aloysius Tarlue has urged central banks in Africa to take measures to protect the public good against any potential disruptions in the financial sector and larger economy that may erupt increasing trend of unregulated cryptocurrencies.
Cryptocurrency is a virtual currency with no official physical asset and is usually driven by private-sector players.
Tarlue who also noted the growing interest of central banks across the world in Central Bank Digital Currency (CBDC) said there was a need for sharing experiences in this new space for the benefit of the African continent.
The apex bank governor made these declarations while addressing the 44th Meeting of the Assembly of Governors of the Association of African Central Banks (AACB) in Banjul, Gambia was held between August 4 -5, as he chaired the two of four plenary sessions of the symposium organized by the secretariat of the AACB.
Further, Tarlue emphasized the greater use of financial technology, including digital finance, electronic money, digital and cryptocurrencies saying, it has been a subject of global policy discussions in the wake of the ongoing Coronavirus pandemic which has had devastating effects on the economies of states.
But while the 3rd Plenary Session focused on, “Are Central Bank Digital Currencies an Effective Alternative to the Development of Unregulated Crypto-Currencies?”, the 4th plenary focused on: “Experience Sharing on Digital Innovations and the Future of the Financial Sector: Opportunities and Challenges for Central Bank Digital Currencies”.
Some key speakers at the meeting are MALANGU KABEDI MBUYI, Governor, Banque Centrale du Congo and outgoing Chairperson of the AACB; Lesetja Kganyago, Governor, South African Reserve Bank; HRwangombwa John, Governor, National Bank of Rwanda; Tarek Amer, Governor, Central Bank of Egypt; Luca Ricci, Division Chief of the African Department, International Monetary Fund among others.
Some African countries, however, were noted to have different stages of developing central bank digital currencies or cryptocurrencies, with a few developed financial systems and markets like Nigeria, Ghana, South Africa, Kenya, and Egypt ahead of other countries.
The meeting that brought together over forty African central banks agreed that central banks in Africa should welcome the digital currency innovation as an opportunity to advance their financial inclusion agenda and prioritize an efficient national payments infrastructure to promote interoperability and real-time settlement as a necessary precondition for adopting digital currencies.
The Governors of the AACB welcomed the progress of the Pan African Payment and Settlement System (PAPSS) project, which was said to be the foundation for promoting intra- and inter-regional trade on the continent and with other regions.
They also agreed that central banks need to be proactive in designing policies and regulatory frameworks to achieve the maximum economic benefits of digital currencies that will reduce the cost of printing hard currencies or paper banknotes.
Meanwhile, participants at the 44th Assembly of Governors of the AACB have underscored the crucial need for member central banks to remain focused and prioritize monetary policy responses to contain the rising inflation levels in member states as a result of the negative impact of COVID-19 and the ongoing Ukraine-Russia crisis.
They also called for policy support from the fiscal side as a means of minimizing the greater future cost of containing inflation.
The governors noted that while the current external shocks were beyond the control of central banks, the Central Banks still needed to be more aggressive in taming rising inflationary pressures, in keeping with their principal mandate of maintaining price stability.
The apex bank leaders also recognized the crucial need for central banks to play a key role in supporting the agricultural sector to mitigate the impact of food shortage in member countries and contain inflationary pressure.
Also, the 44th Ordinary Meeting was attended by His Excellency, Adama Barrow, President of the Republic of The Gambia, and an array of senior officials of the Gambia, members of parliament, members of the diplomatic corps, and the media.
In his address, Barrow commended the governors for their unflinching commitment toward the realization of the monetary and economic integration of Africa.
The Association of African Central Banks is an autonomous and specialized agency of the African Union (AU) working to formulate and implement the African Monetary Cooperation Program (AMCP).
Governor Tarlue was accompanied to the 44th Ordinary Meeting by P. Alphonsus Zeon, Special Assistant; Mussah A. Kamara, Senior Technical Advisor; and Michael B. Ogun, Senior Advisor for Multilateral Relations.
