Madagascar CBDC Tracker

Madagascar is currently in the research phase. Banky Foiben’i Madagasikara (Magascar’s central bank) has repeatedly announced its interest in having consulting firms help with the creation of a CBDC. However, the central bank does not plan to pilot a CBDC until the second quarter of 2025.

CBDC History and Development

In 2020, the Banky Foiben’i Madagasikara announced it was looking for consulting firms that could assist with the creation of a CBDC (referred to as the e-Ariary). Applications were due by October 26, 2020. In November, the central bank shared that 20 consulting companies had applied. The list included Giesecke+Devrient, Pulse, FTHM Consulting, GLW International, and several more.

Also in 2020, the Banky Foiben’i Madagasikara published a one pager. It noted that the central bank was interested in CBDCs because of the rise of electronic payment methods, the impact of the COVID-19 pandemic, and the innovations taking place in the global payments landscape.

In 2021, the Banky Foiben’i Madagasikara announced it was once again looking for firms to assist with the creation of a CBDC. The central bank wrote that it hoped a CBDC would help with “promoting more inclusive access to regulated payments and formal financial services for underserved communities and socio-economic groups as well as reducing of the amount of cash in circulation.” Applications were due by September 6, 2021.

In 2022, the Banky Foiben’i Madagasikara announced a new job position meant to lead the central bank’s CBDC efforts. The posting suggested that the new hire would provide expertise to design the CBDC, plan a roadmap for the CBDC’s launch, promote the project to potential users, collaborate with traditional intermediaries, and monitor the CBDC after it launched. Applications were due March 9, 2022.

In 2023, the Banky Foiben’i Madagasikara shared its CBDC roadmap. It began by noting that its two main goals were to promote financial inclusion and reduce the use of cash. To do so, the central bank planned to issue an intermediated CBDC. However, it estimated that analysis and preparation would take 18 months. That would be followed by an 18-month pilot phase. The first six months (starting in Q2 of 2025) would be a technical pilot. The remaining twelve months would then be a production pilot.

Human Rights and Civil Liberties Concerns

Madagascar earned a 64 out of 100 in Freedom House’s 2023 Freedom in the World report. As Freedom House noted in the report, corruption is a major issue for Madagascar. The issuance or adoption of a CBDC in Madagascar could worsen this issue.

Freedom House reported that “Corruption remains a serious problem in Madagascar despite the adoption of recent reforms and anticorruption strategies.” 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.

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.