THE Reserve Bank of Fiji has ruled out issuing a Central Bank Digital Currency (CBDC) for Fiji and said it is focussed instead on modernising its existing National Payment System.
Responding to a suggestion made by outgoing ANZ Group chief executive officer Shayne Elliott while visiting Fiji last week, that a digitised Fiji dollar issued by the central bank would ensure Government control of the currency base as cryptocurrencies such as Bitcoin pose a threat to that control, RBF Governor Ariff Ali said they are taking a “cautious approach” towards CBDC.
“These digital currencies issued by central banks are seen as a complement to physical currency, offering new opportunities for payment efficiency and growth in financial services,” Mr Ali said.
“However, the digital nature of CBDCs introduces significant risks, and central banks including Fiji are proceeding with caution.
“Some countries are experimenting with CBDCs while others are still assessing whether it would make some sense to issue these digital currencies.
“It is therefore difficult to predict with certainty the future of a CDBC in Fiji.
“In the meantime, the RBF will continue to keep a tab on how other central banks progress on CBDC as well monitor international new developments that may influence Fiji’s payment system moving forward,” Mr Ali said in response to questions sent by The Fiji Times.
He said RBF is currently focused on modernising its National Payments System, enhancing its efficiency and security.
“As part of this effort, the RBF is integrating mobile network operators into the central infrastructure, paving the way for a more robust digital economy.”
Cryptocurrencies such as Bitcoin are decentralised currencies that operate outside Government and central bank controls and are therefore declared illegal in many countries including Fiji.
In an earlier interview with this newspaper, Mr Ali said allowing Fijians to buy cryptocurrencies would compromise the Reserve Bank’s role role of safeguarding Fiji’s foreign reserves.
“It is important to note that legal tender is used to acquire cryptocurrencies using debit and credit cards,” he said.
“The uncertainty due to the lack of regulations surrounding cryptocurrencies means that there is limited centralised data or information on the volume and value of crypto investments.
“In our assessment, if investments in crypto assets are allowed, the RBF could lose a considerable amount of its foreign exchange holdings in a short time.”
