The financial authorities of Mauritius are firmly on track of introducing a Central Bank Digital Currency (CBDC). In November 2019, then Bank of Mauritius (BoM) Governor Yandraduth Googoolye first gave a glimpse of this plan that could make investing in Mauritius with advantages of digital money.

The current BoM Governor, Harvesh Kumar Seegolam, who was appointed March 2020, reiterated Mauritius’s CBDC initiative in a May virtual conference of the media platform CoinDesk. Seegolam said that the CBDC distribution would have to be via the established banking system, even if it is the BoM issuing the virtual money. With this mode, the risk of destabilizing the Mauritian financial system would be avoided, the BoM governor added.

A lead instrument

The country’s push for a digital currency was elaborated some more in the June presentation of Mauritius’s 2020-2021 Budget to the National Assembly. In that budget presentation of the Minister of Finance, Economic Planning and Development, Renganaden Padayachy, the CBDC led the new financial products to be introduced in Mauritius to further diversify and enhance the competitiveness of the country’s Financial Services Sector.

Initial groundwork has been laid to foster investing in Mauritius with advantages of digital currency as a component. In March this year, the licensing rules on custodial services for digital assets took effect. With this move, Mauritius became the “first jurisdiction globally to offer a regulated landscape for the custody of digital assets,” the country’s Financial Services Commission said.

Benefits from digital currency

Mauritius stands to draw several benefits from having its own digital currency. The Bank of Mauritius, with a CBDC, achieves the convenience and security features of cryptocurrencies. At the same time, the central bank keeps in circulation the regulated, reserve-backed Mauritian rupee in the traditional banking system.  Having a CBDC, moreover, enables the country’s financial system to tap into the growth and the rising influence of cryptocurrencies like bitcoin.

Because of these benefits, many central banks of developed economies worldwide are getting into the digital currency bandwagon. Amongst those in the works currently are the digital renminbi for China, CAD-COIN for Canada, and e-krona for Sweden.

Joining the league of countries with digital currency indeed looks just around the corner for Mauritius. With the potential benefits from this new financial product, investing in Mauritius with advantages of digital money should look quite attractive especially to the tech-savvy amongst foreign investors.

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