Namibia CBDC Tracker

Namibia is currently in the research phase. On LinkedIn, the Bank of Namibia issued a call for public consultation and input on CBDCs to help determine whether to issue a CBDC. The accompanying report explained that the Bank of Namibia was primarily interested in CBDC because other central banks were looking into the idea and because of the possibility of improving financial inclusion.

As a member of the Common Monetary Area, Namibia is in a unique position. Unlike the Eurozone where all members use a single currency, each member of the Common Monetary Area issues their own currency. However, each currency is pegged to the South African rand. Acknowledging this relationship, the Bank of Namibia has said, “Namibia should continue to weigh the benefits and drawbacks of any CBDC as a sovereign state, regardless of the Common Monetary Area's stance on a CBDC.” However, at the same time, the central bank has also acknowledged that “Namibia’s degree of freedom regarding a CBDC is likely to be influenced by its membership of the Common Monetary Area.”

CBDC History and Development

In 2020, the Bank of Namibia began internal research on CBDCs with the publication of an “internal consultation paper” titled “Distributed Ledger Technologies, Virtual Assets, Central Bank Digital Currency, and Artificial Intelligence/Big Data Analytics.”

In 2021, the Bank of Namibia ramped up its efforts by having several departments working on “the possible operational dynamics of various CBDC models along with their impact on monetary policy, costs, risks, and benefits.”

The Bank of Namibia hosted a four-hour event in September 2022 to discuss what a CBDC could mean for Namibia’s future. Bank of Namibia governor Johannes !Gawaxab opened the event, noting that both consumers and businesses have been turning toward digital payments. Concerned about the rise of cryptocurrency, he said, “We should defend regulated money and rein in unregulated finance.” He further said, “The case for CBDCs is different in each country and we shouldn’t blindly follow what others implement.”

In October 2022, the Bank of Namibia published a consultation paper. The paper stated that the central bank hoped a CBDC might aid with improving financial inclusion, modernizing the financial system, reducing the use of cash, and improving cross-border payments. Although financial inclusion was cited as the core reason to pursue a CBDC, the central bank acknowledged that “the penetration of electronic money through mobile wallets in the financial sector has been a success story [in Namibia].” The report ultimately said the Bank of Namibia will likely hire a consultant to help with CBDC research. In addition to seeking a consultant, the central bank also asked the general public to share their thoughts on how the CBDC might be designed.

The Bank of Namibia requested technical assistance from the International Monetary Fund in January 2024. This instance marked the third time that the International Monetary Fund had helped the Bank of Namibia with its CBDC development. However, at this stage, the International Monetary Fund “did not find a strong case for issuing a [retail CBDC] at the moment, considering forthcoming payment instruments and improvements.” With that said, the International Monetary Fund recommended that the central bank continue to research CBDCs.

In November 2024, the Bank of Namibia hosted a meeting with central bankers from the Common Monetary Area (e.g., Namibia, South Africa, Swaziland, and Lesotho). The official media statement stated that the agenda included discussing how CBDCs might affect the region, but it did not offer any additional details.

Human Rights and Civil Liberties Concerns

Namibia earned a 77 out of 100 in Freedom House’s 2023 Freedom in the World report. There have been reports of issues around the treatment of human rights and civil liberties, but most of those issues do not tie directly into the issuance or use of a CBDC. Even then, however, it’s important to recognize that the creation of a CBDC could open the door to risks to financial privacy and financial freedom.

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.