The Bank of Mauritius is inching closer to issuing a retail-focused central bank digital currency (CBDC), its governor confirmed Tuesday.
Speaking at CoinDesk’s Consensus: Distributed virtual conference, Governor Harvesh Seegolam said the Republic of Mauritius would be embarking on a pilot in the near future, though he declined to share many details.
“At the level of the Bank of Mauritius, we’re currently working on a project and very shortly we’ll be making announcements … with respect to a potential introduction of a CBDC,” he said.
His comments confirm that the island nation’s exploration into the issuance of a CBDC, first revealed last November by former governor Yandraduth Googoolye, is progressing. The nation has been fairly crypto-savvy, creating a licensing regime for custodians and issuing guidance on security tokens last year.
Read more: Mauritius to License Crypto Custodians Starting in March
Seegolam said any CBDC would have to be distributed through the established banking system, even if the central bank issues the actual currency, to avoid the risk of destabilizing the island’s financial system.
His panel also featured Lord Meghnaud Desai of the Official Monetary and Financial Institutions Forum (OMFIF) and Greg Medcraft of the Organization for Economic Co-operation and Development discussing the different needs and considerations central banks have to focus on for CBDCs. Desai said these considerations need to include the fact that poorer populations may prefer cash, and make heavy use of international remittances.
Island time
The Republic of Mauritius isn’t the only island nation looking to issue its own CBDC.
The Marshall Islands has been working to develop its own CBDC for years, having begun work on the project in February 2018. It recently tapped Algorand as the underlying blockchain infrastructure for the token.
Read more: Algorand Blockchain Chosen as Underlying Tech for Marshall Islands’ Digital Currency
Maurititus has a population of 1.2 million, about the same as the city of Brussels. The Marshall Islands has a population of fewer than 60,000.
Seegolam indicated the launch of Mauritius’ CBDC isn’t necessarily imminent.
“I think we are in a phase where we are all thinking about CBDCs, we are all very interested in introducing CBDCs but there are key fundamental questions that have to be answered first for us to be able to proceed,” Seegolam said. “These are not stumbling blocks, they are just questions on which we need answers to make it work in a more efficient manner.”