Senegal to introduce a blockchain-based national digital currency, eCFA

Rage Comment : Now many countries in the world want to issue their own digital currencies. The People's Bank of China said at the beginning of this year that it wanted to issue its digital currency as soon as possible. Recently, Senegal will also become one of the first countries in the world to introduce a national digital currency based on blockchain technology. Its digital currency is called eCFA, which can be used in all mobile wallets and e-wallets, ensuring universal liquidity and interoperability, and providing transparency for the entire digital ecosystem of WAEMU. Digital currency may become the trend of future currency. After all, everyone likes innovative things that bring convenience.

Translation: Nicole

Senegal will become one of the first countries in the world to introduce a national digital currency based on blockchain technology. The digital currency, called eCFA, will become legal tender along with the CFA franc (the national currency of the country and the region) and will be adopted by 14 countries in the region. These countries are mainly French colonies in West Africa.

First reported by local publication iAfrikan, the development of the eCFA stems from a partnership between regional bank Banque Régionale de Marchés (BRM) and eCurrency Mint Ltd, a fintech startup focused on research into central bank-issued digital currencies.

Notably, the digital currency will be issued in accordance with and in compliance with the electronic money regulations of the Central Bank (BCEAO). As the central bank of the West African Economic and Monetary Union (WAEMU), the BCEAO will also oversee the distribution of the digital currency outside of Senegal (in other West African countries). A press release earlier this month indicated that Senegal is the first country to witness the eCFA, after which the second phase of the rollout will be in Cote d’Ivoire (Ivory Coast), Benin, Burkina Faso, Mali, Niger, Togo, and Guinea-Bissau.

An expert also said at the press conference:

“eCFA is a highly secure digital work that can be used in all mobile wallets and e-wallets. The digital currency can ensure universal liquidity, achieve interoperability, and provide transparency to the entire digital ecosystem of WAEMU.”

The eCFA will be issued by BRM, a financial institution specializing in investment banking and capital markets in the WAEMU region.

Alioune Camara

BRM CEO Alioune Camara said in the statement:

“eCFAs, backed by our banking system and central banks, are the most secure way to digitize our economy. We can now facilitate full interoperability between all electronic money systems.”

While the announcement that the digital currency replicates the value and usability of legal cash equivalents in multiple countries is significant, details remain scarce. However, what is known is that the eCFA will be cryptographically protected and designed to operate with other digital cash systems in Africa, a continent where the vast majority of people remain unbanked.

Digital currency beats paper cash

The move to introduce digital currencies comes at a time when other central banks around the world are researching or developing digital cash equivalents of their own paper currencies. The People’s Bank of China – China’s central bank – is arguably the most visible example of a central bank’s interest in digital currencies. Earlier this year, the bank publicly revealed its intention to issue its digital currency as soon as possible. Recently, the central bank issued a recruitment call seeking blockchain and cryptography experts to help with the development of the digital currency.

This month, Singapore’s central bank, MAS, announced the development of a blockchain PoC (proof-of-concept) pilot to facilitate cross-border and domestic and international interbank payments.