Tonga CBDC Tracker

Tonga is currently in the research phase. The National Reserve Bank of Tonga issued a statement that briefly mentioned that the central bank is exploring whether a CBDC would be appropriate for Tonga.

CBDC History and Development

In 2021, the National Reserve Bank of Tonga issued a statement because the central bank became aware that “there are social media posts and mainstream media articles relating to Bitcoin potentially becoming a legal tender in the Kingdom of Tonga.” In this context, the central bank added that “Consideration of a Central Bank Digital Currency is still at its very exploratory phase to determine whether it is suitable to be introduced in a small island economy like Tonga.”

In 2022, the company Soramitsu investigated how a CBDC might affect Tonga. However, this development should not be attributed to the National Reserve Bank of Tonga. Rather, the Japanese government commissioned Soramitsu to conduct a study on Tonga, Fiji, the Solomon Islands, and Vanuatu.

Human Rights and Civil Liberties Concerns

Tonga earned an 81 out of 100 in Freedom House’s 2024 Freedom in the World report. Despite the high score, corruption remains a problem in Tonga. The issuance or adoption of a CBDC in Tonga could worsen the issue.

According to Freedom House, “[T]hree ministers were convicted of bribing voters in the 2021 election campaign and had their elections voided.” One of those three ministers, Tatafu Moeaki, was later made the governor of the central bank. 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.