IMF Urges Caution, Recommends Strengthening Existing Payment Systems
The Bank of Namibia (BoN) is actively exploring the possibility of issuing a Central Bank Digital Currency (CBDC) to enhance cross-border payments and improve financial inclusion. The bank has entered the preparatory phase following a technical assistance mission from the International Monetary Fund (IMF), which provided guidance on the feasibility of a digital currency rollout.
Details on Namibia’s CBDC Plans
Kazembire Zemburuka, BoN’s Director of Strategic Communications and International Relations, stated that the central bank is studying how a CBDC could support financial inclusion in Namibia. He added that BoN’s approach aligns with the IMF’s phased guidelines for launching digital versions of national currencies, which include preparation, proof-of-concept, prototyping, pilot, and production phases.
In its assessment, the Bank of Namibia has also engaged in discussions with central banks in Eswatini, Lesotho, and South Africa to determine the feasibility of a CBDC for regional cross-border transactions.
IMF’s Recommendation: Strengthen Existing Systems First
Despite supporting BoN’s research into a CBDC, the IMF has advised against an immediate rollout. According to its February 2025 feasibility study report, the IMF urged Namibia to focus on improving its existing payment infrastructure before considering a digital currency launch.
The IMF also noted that a retail CBDC may not provide a unique solution to Namibia’s financial inclusion challenges. Instead, it recommended that the central bank prioritize assessing how a CBDC could impact monetary policy and financial stability.
Zemburuka confirmed that BoN is taking the IMF’s recommendations into account, refining its approach before making any further commitments to a CBDC launch.
What’s Next for Namibia’s CBDC Initiative?
As Namibia continues its exploratory phase, its central bank will weigh the potential benefits and risks of a CBDC while engaging in regional discussions. The focus remains on strengthening the country’s financial system to ensure a smooth transition should a digital currency be introduced in the future.
