Malawi CBDC Tracker

Malawi is currently in the research phase. The Reserve Bank of Malawi announced in August 2024 that it was looking for a consultant to build a CBDC so it may soon enter the pilot phase.

CBDC History and Development

On August 23, 2024, the Reserve Bank of Malawi published a request for proposals seeking a “consultant to facilitate the development, experimentation and piloting of Central Bank Digital Currency in Malawi through a comprehensive Proof of Concept Project.” The central bank will accept bids from consultants until October 8, 2024.

Human Rights and Civil Liberties Concerns

Malawi earned a 66 out of 100 in Freedom House’s 2023 Freedom in the World report. Corruption, oppression, and surveillance are major issues for Malawi. The issuance or adoption of a CBDC in Malawi could worsen these issues.

“Corruption is a significant challenge in Malawi, with senior government officials being implicated in corruption in recent years,” according to Freedom House. 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 “Nongovernmental organizations (NGOs) are active in Malawi, though civil society figures deemed to support the opposition are often subject to intimidation and arrest.” 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.

According to the U.S. State Department, “There were credible reports the government monitored private online communication without appropriate legal authority.” For example, “police arrested Chidawawa Mainje based on his fully encrypted private communication on a social media platform.” Unfortunately, a CBDC could be used to greatly expand surveillance by putting financial records on government databases by default.

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.