The BCEAO is working on its own digital currency

AA / Lomé / Alphonse Logo

Jean Claude Kassi Brou, governor of the Central Bank of West African States said on Tuesday in Lomé that the BCEAO is considering having its own digital currency.

“We ourselves are working today on a digital currency to complete the full range of uses that we already have of electronic money in the mobile banking space”, he indicated during the round table. of the second edition of the African Financial Industry Summit that the Togolese capital hosted on November 28 and 29, 2022.

This panel discussion focused on the theme: “New Economic Order: How Could Global Systemic Reform Benefit Africa? “. It brought together, in addition to Jean Claude Kassi Brou, Dr Ernest Addison, the Governor of the Central Bank of Ghana, Dr Denny Kalyalya, the Governor of the Central Bank of Zambia, the Honorable John Rwangombwa, the Governor of the Bank of Rwanda, and Carlos Lopez, honorary professor at the University of Cape Town

Jean Claude Kassi Brou said that “digitalization or electronic money activities are very important today in the region because they allow an extension of financial services to a very large part of the population.

“Whether through savings services, payment services, transfer services, electronic currencies allow significant reductions in the costs of activities, increased transparency thanks to electronic networks (which the systems use, editor’s note) . And I think central banks are heavily engaged in this process. Since it has become unavoidable and inevitable. And this is part of one of our major objectives, which is financial inclusion. That is to say to go beyond the banks, and reach people with low incomes for a greater democratization of access to financial services. It’s really essential,” he explained.

Brou also said that with the ongoing reforms at the central bank level, in particular with the authorizations of electronic currencies granted to Fintechs, the financial inclusion rate compared to the 2016-2021 financial inclusion strategy adopted by the central , “has gone from 45% to 67%”.

— Fight against fraud and money laundering

But as the field of use of all these electronic money instruments is widened, Jean Claude Kassi Brou thinks that all means must be implemented to “ensure clear, precise and transparent regulations that take take into account factors such as the fight against fraud and money laundering”.

“Because as we expand, there are ill-intentioned people who seize the channels as vectors for money laundering. It is therefore necessary to ensure that these instruments secure the users of electronic financial services. We must also take into account everything related to cyber security and cyber crime. So, to achieve an active, far-sighted and regulated financial system that plays its role,” argued the Governor of the BCEAO.

— Crypto-currency, very risky financial assets?

Regarding the great current debate on the reliability or not of crypto-currencies that he prefers to call crypto-assets, Jean Claude Kassi Brou called for “making a very clear distinction” between everything that is electronic money which makes a direct and specific contribution to the landscape and the entire financial sector, and crypto-assets which, for him, “are very risky financial products or assets”.

Above all, he wanted to warn: “If some people use them, it is at their own risk and peril”. Because, he says, “Crypto-assets are not money. It is financial assets with all that goes with it”.

But this position does not prevent the bank from playing its role of regulator by trying to see clearly in this financial system which is gaining momentum.

“What we are working on is that from the moment these crypto-assets exist in the landscape, there needs to be regulation that is consistent, objective and that takes into account all the risks of the crypto-asset sector. concluded Jean Claude Kassi Brou

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