The Central Bank of Eswatini has released the design document for its potential digital currency, called the digital lilangeni. This currency will be tokenized and operate on a distributed database.
Eswatini Announces Digital Lilangeni CBDC
The Central Bank of the Kingdom of Eswatini, a small landlocked country with a population of 1.2 million located between South Africa and Mozambique, has just released the design document for its digital currency, called the digital lilangeni.
The digital lilangeni will be a retail CBDC that is tokenized and run on a distributed database, rather than using a Distributed Ledger. Blogger and CBDC consultant John Kiff has shared information about this document.
According to the design document, the digital lilangeni will have online wallets managed by financial institutions, as well as hardware wallets capable of offline operation, potentially in the form of smart cards.
This CBDC will be distributed through intermediaries, with financial institutions distributing the currency to users through the infrastructure operated by the central bank. It will have a degree of assumed anonymity to protect privacy without compromising KYC and anti-money laundering requirements.
Payments using the digital lilangeni can be programmable at the wallet level, allowing for the automation of payments or the setting of spending limits for children.
However, cash remains the most widely used payment method in Eswatini, despite the central bank's efforts to build a "less cash" society and the development of digital financial services such as mobile wallets and bank cards. In 2022, the central bank decided to phase out cheques.
Context of Eswatini's CBDC
Giesecke+Devrient, using their Filia CBDC technology, has gone through a proof-of-concept trial, a limited pilot, and a real-world pilot. Staff training has caused delays in these projects and will need to be addressed on a larger scale if the CBDC is to be deployed.
Eswatini's CBDC proposal has many similarities with Rwanda's digital currency plan. Like Rwanda's digital franc, Eswatini's CBDC will be token-based and operate on a distributed database, which the Rwandans consider more reliable than blockchain.
Additionally, both Rwanda's and Eswatini's CBDCs will have programmable features, which, while not favored in developed countries, can bring benefits to less developed economies. For example, in Kazakhstan, programmable CBDC is seen as a tool to combat corruption.
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The article Eswatini Announces Retail Token-based CBDC first appeared on CoinMoi.
