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The East African countries will finalize their plans to set up a regional central bank as they move closer to their goal of a single regional currency.
East African Community (EAC) Secretary General Peter Mathuki recently revealed that the regional Council of Ministers will meet this year to discuss details, including the location of the regional bank.
“EAMI (East African Monetary Institute) will be in place this year which will allow us to align the fiscal and monetary policies of the member countries, then in about three years time we will have a common currency,” Mathuki told reporters last week. .
With a population of 300 million people, the East African Community comprises seven countries, with the Democratic Republic of Congo (DRC) being the most recent member to join the bloc. In an effort to facilitate trade and movement of people in the region, the seven members have been working towards a common currency for years. The goal is to have a common currency by 2024, and regional banks are the main foundation.
EAC members are among many central banks exploring central bank digital currencies (CBDC). Kenya published a discussion paper on the potential of CBDCs last year, with the Central Bank of Kenya designating cross-border remittances as the main target for digital shillings. Uganda announced a similar move last year, saying it was studying Nigeria’s eNaira and possible amendments to the law to accommodate CBDCs.
According to a regional report, the EAC is exploring the feasibility of a regional CBDC as a replacement for the East African Payments System (EAPS).
While no regional CBDCs have launched yet, there have been a number of other endeavors, the most notable of which is the digital euro project. Earlier this month, finance ministers in the region, through the Eurogroup, argued that the digital euro should be given the status of legal tender but must be supported by the European public.
To learn more about central bank digital currencies and some of the design decisions to consider when creating and launching them, read the nChain CBDC guidelines.
Watch: CBDC and BSV
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New to Bitcoins? Check out CoinGeek Bitcoins for Beginners section, the ultimate resource guide for learning more about Bitcoin—as Satoshi Nakamoto originally envisioned it—and the blockchain.
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