business

Dec. 22, 2021

NEO SENOKO

2 min read

Digital currency the way to go - CBL

Digital currency the way to go - CBL

The Central Bank of Lesotho

Story highlights

  • Lesotho is largely a cash society as people still use cash to make payments
  • The main purpose of CMA trade is to ensure that all parties can have same development opportunities

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JUST like other countries in the Common Monetary Area (CMA) region, Lesotho through the Central Bank of Lesotho (CBL) has a long-term plan to move into the digital currency to stay in line with the latest developments across the region.

Dr Retšelisitsoe Matlanyane, the Governor of CBL made this revelation on Tuesday during the launch of the enhanced maloti banknotes.

The CMA links Lesotho, South Africa, Namibia and Eswatini into a monetary union and is allied to the Southern African Customs Union (SACU), a custom union of Lesotho, South Africa, Botswana, Eswatini and Namibia.

The main purpose of this trade is to ensure that all the parties can have the same development and equitable economic advance in order to be treated as a whole.

“In that lite, there are other developments that we are making although still at very rudimentary stage, there are developments in what we call digital currency and in our region as the CMA region and as Lesotho, we are looking at that option as well to see that in the future we also move on to digital maloti,” Dr Matlanyane said.

She noted that at the moment, Lesotho is largely a cash society in that people still use cash to settle and make payments.

“While this is not our intention for the future, it is desirable that even as we use cash, we use cash that is safe and that helps us to protect the economy. The long-term future is for us to be a cash lite society that uses electronic and digital means of payments to make payments as well as settlements and in that lite therefore, the bank is in the process of making investments in that regard,” the Governor said.

She highlighted the importance of proper education in that space, citing that the bank will therefore undertake campaigns that will educate people about the systems and the payment channels as well as teach them about the dangers of using cash.  

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In 2006 in the space of payments and settlements, the CBL started to introduce systems where settlements are made in terms of digital means.

“So we had first, the Real Time Gross Settlement system (RTGS) followed by the Maseru Clearing House in which we had Electronic Funds Transfer system (EFT) and other methods of payments. Cheques were previously also cleared digitally. These payment streams are intended to be alternatives to cash in the transfer of value between users so today all commercial banks use Real Time Gross Settlement system to handle high value payments, for low value payments we use our automated clearing house. So, low value payments are carried out using EFT,” Dr Matlanyane further showed.

 

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