The Bank of Mauritius is pushing ahead with its plans to introduce a central bank digital currency (CBDC), revealing that a pilot project is set to kick off in the coming months.
Governor Harvesh Seegolam announced this development at the Bloomberg Financial Forum in Port Louis, highlighting the advanced stage of the work. He stated, “We have now entered the experimentation phase.”
This move towards a digital rupee was first announced back in 2019. Since then, Mauritius has been proactive in embracing financial technology, even amending laws to enable the central bank to grant licenses for digital banking.
Seegolam highlighted a notable surge of interest in establishing digital banks within Mauritius, with several applications already in the pipeline.
However, he also cautioned about the potential risks associated with the swift advancements in financial technology, insisting on the need to thoroughly understand their implications on economic activity, financial stability, reputation, and inflation.
Additionally, Mauritius aims to position itself as a prime destination for multinational corporations seeking to establish their treasury headquarters in the region, leveraging its modern and robust financial services sector.
While much of Governor Seegolam’s address revolved around financial market development and digital transformation, he took a moment to mention that the central bank has significantly reduced its intervention in foreign exchange markets, from $622 million in the same period last year to $164 million since the beginning of the current year.
However, he reassured that the Bank of Mauritius remains prepared to step in and provide support to the FX market if the need arises, particularly during this period of year-end stock building.
Source: MENAFN
