<\/p>\n
An International Monetary Fund (IMF) technical assistance report assessed Project Sunbird, a joint Common Monetary Area initiative exploring wholesale central bank digital currency for regional transactions.<\/p>\n
<\/p>\n
The project seeks to reduce cross-border payment costs, accelerate settlements and limit dependence on correspondent banks.<\/p>\n
<\/p>\n
However, the IMF report found that earlier assessments concentrated heavily on retail payments and did not sufficiently examine wholesale-market challenges.<\/p>\n
<\/p>\n
Those challenges include liquidity constraints, foreign-exchange limits, prefunding requirements, currency-conversion costs and reliance on currencies from outside the Common Monetary Area.<\/p>\n
<\/p>\n
The IMF recommended updating the project\u2019s diagnostic framework to examine how liquidity, collateral and settlements operate across interbank, foreign-exchange, securities and money markets.<\/p>\n
<\/p>\n
Project Sunbird should also add specialists with expertise in liquidity management, foreign-exchange operations, securities settlement, bond markets and monetary operations.<\/p>\n
<\/p>\n
Workshop participants identified automated regulatory compliance, low-value transfers and expanded access for non-bank financial institutions as possible uses for wholesale digital currency.<\/p>\n
<\/p>\n
Cross-border transactions currently face delays caused by duplicated anti-money laundering checks, complex balance-of-payments reporting and inconsistent regulatory codes.<\/p>\n
<\/p>\n
Technology could automate some checks and reduce manual intervention, but the IMF cautioned that digital currency alone would not resolve regulatory differences among participating countries.<\/p>\n
<\/p>\n
Expanding access to central bank settlement systems could increase competition by allowing non-bank institutions and foreign entities to participate more directly.<\/p>\n
<\/p>\n
However, broader access would require strong regulation and supervision to protect financial stability.<\/p>\n
<\/p>\n
The IMF also identified governance challenges, including high staff turnover and limited time allocated to Project Sunbird. Some team members devote only 1% to 10% of working time to the initiative.<\/p>\n
<\/p>\n
The Report recommended establishing a steering committee comprising senior representatives from each central bank, allocating more dedicated personnel and clarifying responsibilities.<\/p>\n
<\/p>\n
Wholesale digital currency could improve settlements and indirectly lower the cost of remittances, particularly for eSwatini and Lesotho, which depend heavily on transfers from SA.<\/p>\n
<\/p>\n
The IMF stressed that the technology was not a universal solution and should be assessed against upgrades to existing payment infrastructure before implementation decisions were taken.<\/p>\n
<\/p>\n
–IMF\/ChannelAfrica–<\/p>\n","protected":false},"featured_media":44335,"template":"","meta":{"_acf_changed":false,"_members_access_role":[],"_members_access_error":"","_links_to":"","_links_to_target":""},"news-type":[44],"class_list":["post-48785","news","type-news","status-publish","has-post-thumbnail","hentry","news-type-finance","entry"],"acf":{"short_description":"Central banks in eSwatini, Lesotho, Namibia and South Africa (SA) should strengthen governance and expand technical expertise before advancing plans to use central bank digital currency for cross-border payments.","published_date":"","news_description":"Central banks in eSwatini, Lesotho, Namibia and South Africa (SA) should strengthen governance and expand technical expertise before advancing plans to use central bank digital currency for cross-border payments.","form_embed":"","author":"","image_caption":""},"_links":{"self":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/48785","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news"}],"about":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/types\/news"}],"version-history":[{"count":2,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/48785\/revisions"}],"predecessor-version":[{"id":48787,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/48785\/revisions\/48787"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media\/44335"}],"wp:attachment":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media?parent=48785"}],"wp:term":[{"taxonomy":"news-type","embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news-type?post=48785"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}