Eswatini CBDC Tracker

Eswatini is in the pilot phase. On its CBDC webpage, the Central Bank of Eswatini said, “The Bank is carefully examining whether there is a need to issue a CBDC in Eswatini and how such a CBDC could work. … However, the Bank has not yet decided whether to introduce one.” Among these efforts, the central bank reported it has conducted a proof-of-concept and two pilot projects.

CBDC History and Development

In June 2019, the Central Bank of Eswatini “facilitated a consultative forum on CBDCs where the Bank engaged with industry stakeholders.” After doing so, the central bank started working with the Centre for Financial Regulation and Inclusion (or Cenfri) to further study CBDCs.

In February 2020, the Central Bank of Eswatini published a report that outlined the findings from the first phase of its “Eswatini CBDC Diagnostic Study.” The report focused on three areas: consumer demand, payments system efficiency, and economic policy. Out of those areas, the central bank found improving payments efficiency to be the most compelling reason to adopt a retail CBDC. The next phase of this study will determine whether “Eswatini satisfies key prerequisites needed to make CBDC gains a reality.”

In October 2022, the Central Bank of Eswatini partnered with the company Giesecke+Devrient to research CBDC development. Although the timing is not entirely clear, the central bank also reported it has conducted a proof-of-concept and two pilot projects. Among these, the “Canteen Pilot Project” tested the use of smart cards and point of sale terminals within the central bank’s cafeteria.

In 2024, the Central Bank of Eswatini published a report on the possible design of a CBDC in Eswatini (referred to as a digital lilangeni). As key design principles, the central bank says its CBDC would provide universal accessibility, have full legal tender status, be fully compliant with anti-money laundering laws, not pay interest, be interoperable, be available 24/7/365, contribute to cross-border payments, limit how much citizens can own, and be free to use. The central bank also envisions the CBDC as being token based and intermediated.

Human Rights and Civil Liberties Concerns

Eswatini earned a 17 out of 100 in Freedom House’s 2023 Freedom in the World report. When it comes to the issuance or use of a CBDC, however, the most relevant issues are corruption and the effort to oppress free expression. A CBDC could worsen both issues.

“Corruption is a major problem, and implicated officials generally enjoy impunity,” according to Freedom House. There are mechanisms to combat corruption, but it’s been reported that civil society groups accused the government of using these tools in “pursuing politically motivated cases and serving the interests of the prime minister.” The existence of pervasive corruption is a major concern with CBDCs because it calls into question any promises that might be made by the government to limit surveillance, control, or other risks of CBDCs. Furthermore, the existence of corruption calls into question whether CBDC policies might be designed to exert political favoritism through subsidies, price controls, or other targeted restrictions.

Freedom House also reported that “Journalists have faced questioning, detention, or other forms of scrutiny for their reporting or their own political activity in recent years.” In fact, many journalists have left the country due to this treatment. Unfortunately, average citizens also experience similar oppression. Freedom House further reported that the government shut down the internet in an attempt to crack down on protests, security agencies monitor personal communications, and the government banned citizens from petitioning the government. Unfortunately, a CBDC could be used as another tool in this effort. Across the world, governments have often turned to freezing and seizing the money of activists, political rivals, and protestors to undermine the opposition. A CBDC would make such initiatives easier by allowing governments to take direct control of each citizen’s finances.

For additional information on concerns regarding violations of human rights and civil liberties, see the following reports by Amnesty International, Financial Tyranny Index, Freedom House, Human Rights Watch, Privacy International, and the U.S. Department of State. For additional information on concerns regarding the risks of CBDCs, see the following webpage and report by the Cato Institute: The Risks of CBDCs and Central Bank Digital Currency: Assessing the Risks and Dispelling the Myths.

For additional information regarding metrics, the methodology page explains each of the data points and provides their respective sources.