Digital Currency Usage a continual advancement growth in technology, increases digital trade
By: Our Correspondent
The International Monetary Fund (IMF) Resident Representative in the Gambia, Mamadou Diulde Barry has on Wednesday acknowledged to Governors of various African Central Banks and heads of financial and monetary institutions that the use of digital currencies will continue to grow with advancements in technology and increases in digital trade both at national and transnational levels. That their adoption is already global and growing at a very fast rate, aided by the accelerated use of digital technology during the Covid-19 pandemic.
Mr Barry noted that the use of stable-coins, albeit very limited before the pandemic, that more than quintupled in value in 2021, going from US$28.5 billion to US$158.6 billion, while crypto-assets tripled from US$763.3 billion to US$2.3 trillion.

In his key note addressed at the official opening ceremony by President Adama Barrow of the 44th Ordinary Session of the Assembly of Governors of the African Continent with the theme “Digital Innovation and the Future of the Financial Sector: Opportunities and the Challenges for Central Banks Digital Currencies,” Barry revealed with accordance to a blog posted in July 2021 by the Director of the IMF Money and Capital Market Department, Adrian Tobias, e-Money accounts are not only growing much more rapidly in low- and middle-income countries than in the developed economies, but are also now more numerous, with Africa, in particular, leading the way.
He said that Kenya, South Africa, and Nigeria were among the top 10 in the 2021 crypto-adoption-index at the fifth, seventh, and eighth positions, respectively which in October 2021, Nigeria became the first country in Africa and the second in the world after the Bahamas to issue a CBDC—the e-Naira. That the Central African Republic in April this year became the first country in Africa and the second in the world after El-Salvador to adopt the Bit coin both as legal tender, and its official currency alongside the existing fiat currency, the CFA Franc. However, the said the hasty adoption of bit coin as legal tender poses major challenges for the country and the region.
He added that based on IMF data, more than 110 countries around the world, including at least 13 countries in Africa, are currently at different stages of exploring options of using CBDCs. CBDCs are generally more stable than crypto currencies and could provide cheaper and faster payments, along with several other benefits including fostering financial inclusion.
The IMF further stated that hosting of the face-to-face Ordinary Meeting of the Assembly of Governors of the AACB in Banjul demonstrated the significant progress they have made in the fight against the COVID-19 pandemic and there paid his tribute to the immense sacrifices of thousands of women and men in the health sector, the Gambian authorities at all levels, the private sector and international partners who have, in various ways, contributed to this outcome.
He noted that the economic consequence of the war in Ukraine is already compounding the socio-economic impact of the pandemic confronting central banks in the region and around the world, leaving them with a difficult policy tradeoff between addressing elevated inflationary pressures and fostering the nascent post pandemic economic recovery.
By successfully navigating through this difficult situation, he said it requires strong policy coordination among the institutions in charge of macroeconomic management and significantly strengthening the independence of the central banks with a view to meeting their policy objectives and avoiding de-anchoring of inflation expectations that could delay the return to price stability.
He said that with this year’s theme, it was important to note that central banks have always been at the cutting edge of financial technology and innovation, that in the past, the invention of banknotes, the processing of payments through debits and credits in book-entry accounts, and the evolution of interbank payment systems from the telegraph to internet protocols were all transformative innovations.
Adding that today, central banks are facing new and unprecedented challenges such as distributed ledger technology, new data analytics (artificial intelligence and machine learning), and cloud computing, along with a wider range of mobile access and increased internet speed.
However, he said the rapid and ongoing progress in digital technologies has increased the prospect for adoption of new forms of money with the potential of transforming the financial landscape and that in Sub-Saharan Africa, the use of mobile money as percentage of the population aged-15 years and above, almost tripled between 2014 and 2021—going from 11.6 percent to 33.2 percent.
Barry outlined that the concept of digital money is not only diverse but also evolving swiftly which includes publicly issued central bank digital currencies, which are digital forms of fiat money fully backed by the central bank and intended as legal tender; and privately issued digital currencies or payment systems such as e-Money (like Kenya’s mobile money transfer service, MPesa); the stable-coins (which are digital tokens backed by external assets, like the USD-coin); and crypto-assets like the Bitcoin, which are not only unbacked, but which are also subject to the caprices of market forces with extreme volatility to truly qualify as money.