A digital franc holds promise, but users will determine success

A steady march toward a digital currency has entered a new and consequential phase. The National Bank of Rwanda’s five-month proof of concept (PoC) for the proposed e-Franc Rwandais suggests that a retail central bank digital currency (CBDC) is technically feasible and could enhance instant payments, financial inclusion and system resilience. Yet feasibility is not the same as necessity, and the next steps will demand caution as much as ambition. The PoC’s most compelling promise lies in resilience and inclusion. Offline payments using secure smartcards and USSD functionality for feature phones address real constraints in the connectivity landscape. In a country where network disruptions and limited smartphone penetration remain realities, the ability to transact digitally without internet access could provide a meaningful safety net. Equally significant is the idea of introducing a public digital payment rail in a market currently dominated by mobile money providers. If designed well, the e-Franc could stimulate fintech innovation and foster healthier competition. But practicality will hinge on adoption. User surveys showed interest in everyday use cases, yet only a live pilot can determine whether a CBDC would genuinely reduce reliance on cash. Experience elsewhere offers sobering lessons. Nigeria’s eNaira, launched with high expectations, has struggled with uptake due to limited incentives and public skepticism. The Bahamas’ Sand Dollar, though innovative, required sustained public education and regulatory fine-tuning to gain traction. Even China’s digital yuan, arguably the most advanced large-scale experiment, has depended heavily on state-backed incentives to drive usage. There are also risks. A poorly calibrated CBDC could disrupt commercial banks if deposits migrate rapidly into digital wallets. Cybersecurity threats could test the resilience the system aims to strengthen. Cross-border ambitions, while promising for remittance cost reduction, introduce complex foreign exchange and regulatory challenges. The central bank’s decision to proceed with a 12-month pilot rather than rush to issuance is therefore prudent. The key lesson from global peers is that technology is the easy part, but trust, incentives and ecosystem alignment are harder. If the e-Franc is positioned as a complement, not a replacement to cash and existing digital channels, and if safeguards remain robust, Rwanda could strengthen its reputation as a measured digital innovator. But success will depend less on what is technically possible, and more on what citizens and businesses truly find useful.

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A digital franc holds promise, but users will determine success