The Bank of Mauritius has reported significant progress in its plans to unveil a central bank digital currency, with a pilot project set to commence in the coming months. Harvesh Seegolam, the Governor of the Central Bank of Mauritius, highlighted that the work is already advanced, and the experimentation phase has begun.
The intention to explore a digital rupee was initially announced by Mauritius in 2019. Since then, the island nation has adapted its approach to financial technology, including modifying legislation to enable the central bank to issue digital banking licenses. Additionally, Mauritius aims to establish itself as a center for multinationals to establish their treasury headquarters.
He emphasized that, despite the bank’s willingness to embrace new technologies, the swift advancements in fintech also pose risks along with their advantages..
“The necessity for us to thoroughly understand the possible effects on economic activity, financial stability, reputation, and even inflation is paramount,” he asserted.
He disclosed that the island also aims to market itself as a centre for multinational corporations to establish their regional treasury headquarters, leveraging its contemporary financial services sector.
Most of the governor’s statements concentrated on the growth of financial markets and the digital shift. Yet, he made a point to highlight that the central bank has drastically reduced its foreign exchange market intervention to US$164 million from the start of the year, a steep fall from $622 million during the same timeframe in 2022.
“Nevertheless, in this part of the year, synonymous with the accumulation of year-end inventories, the Bank of Mauritius remains prepared to lend its support to the FX market if necessary,” he confirmed.