The National Bank of Rwanda (BNR) has successfully completed a five-month Proof of Concept (PoC) phase for a potential Central Bank Digital Currency (CBDC), a digital version of the Rwandan franc known as the e-Franc Rwandais (e-FRW), according to a report released on February 26.
Conducted between May and October 2025, the PoC tested how a Rwanda-specific CBDC could function within the national payment system and what value it could offer citizens, businesses and financial institutions.
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The PoC is the second stage in the five-step CBDC development framework recommended by the International Monetary Fund (IMF): preparation, proof-of-concept, prototype, pilot, and production.
According to the central bank, the exercise confirmed that a retail CBDC is technically feasible and could support secure, instant digital payments while strengthening financial inclusion and system resilience.
However, BNR emphasised that no decision has yet been made to issue the e-Franc nationally. The next phase will be a 12-month pilot involving real users in controlled conditions.
CBDC and physical cash
A CBDC is digital money issued and regulated by a country’s central bank, holding the same legal status as physical cash.
Unlike cryptocurrencies, a CBDC is sovereign legal tender backed 1:1 by the national currency. The proposed CBDC would be designed for everyday retail transactions.
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The e-Franc is designed as a retail CBDC, meaning it would be accessible to the general public for everyday transactions such as sending money, paying merchants or settling bills.
According to BNR, a CBDC is not intended to replace physical cash, but rather to complement existing payment methods including mobile money, bank transfers and cards.
Testing the four priority "sweet spots”
The CBDC exploration builds on feasibility studies conducted in 2022–2023, which identified four high-impact ‘sweet spots’ where a specific CBDC could deliver value.
Resilience through offline payments
One of the key outcomes of the PoC phase was the successful testing of offline payments using secure smartcards in a live merchant environment. Transactions were completed without internet connectivity and reconciled once the system reconnected.
User research showed strong demand for this feature, with most participants indicating they would prefer to keep part of their balance available offline "just in case” of network disruptions.
USSD functionality was also tested in collaboration with a telecom operator, allowing wallet creation, transfers and balance checks on feature phones, a key inclusion channel in a country where smartphone penetration is not universal.
"These findings validate the possibility of a CBDC increasing the resilience of payment systems, providing an alternative to maintain service during outages through offline capabilities,” the BNR report reads.
Innovation and competition
Rwanda’s digital payment ecosystem is currently dominated by mobile money transfers. A CBDC could introduce a public digital payment rail, potentially fostering greater competition and encouraging fintech innovation.
Through a national Ideathon held during the PoC phase, fintechs and developers explored programmable wallet features such as targeted disbursements, spending controls and integrated billing systems.
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Rather than altering the digital currency itself, programmability was tested at the wallet level, preserving cash-like neutrality while enabling innovation.
Supporting the cashless agenda
During online testing, the e-Franc enabled instant peer-to-peer and merchant payments with immediate finality, meaning funds received could be spent again instantly, similar to physical cash.
User research conducted among 115 survey participants and 15 interviewees found strong interest in everyday use cases such as sending money to family, paying for groceries, online shopping, transport and government services.
However, BNR noted that only a live pilot using real transactions can determine whether a CBDC meaningfully reduces cash usage.
Cross-border efficiency
The PoC tested a simulated cross-border payment to assess user experience and explore interoperability, compliance, liquidity, and foreign exchange issues.
Sub-Saharan Africa remains among the most expensive regions globally for sending remittances. The simulation demonstrated that coordinated CBDC payments across jurisdictions could enable near-instant settlement and clearer foreign exchange quotations.
A narrowly scoped live corridor with one partner central bank is expected to be explored during the pilot phase.
Legal and policy considerations
The PoC also examined legal pathways for potential issuance, outlining three options: limited amendments to the central bank law, incremental reforms across related legislation and a standalone e-Franc law.
The proposed framework follows a two-tier model, where financial service providers would distribute the CBDC to users, while the central bank maintains oversight, sets limits and safeguards monetary stability.
Privacy-by-design principles, cybersecurity standards and strict supervision mechanisms will guide future phases, BNR said.
Next step: 12-month pilot
Building on the PoC findings, the central bank will now proceed with a 12-month pilot phase. The pilot will involve a limited and diverse group of users in Kigali, one secondary city and selected rural locations.
It will prioritise inclusive access channels such as USSD and low-cost devices, expand real-life merchant use cases in controlled environments, and further explore interoperability and narrowly scoped cross-border applications with partner central banks.
The pilot will incorporate safeguards including cybersecurity standards, privacy protections and close coordination with financial institutions and relevant authorities.
BNR said it would define clear performance indicators and exit criteria to guide evidence-based decisions on any future scale-up.