Mauritius is set to join the growing list of countries embarking on the CBDC journey with an emphasis on maintaining monetary sovereignty. The Bank of Mauritius, the country's central banking authority, has announced a three-year exploration phase leading up to the launch of a CBDC pilot program in November 2023. This CBDC pilot program is an initiative of the bank's current governor, Harvesh Kumar Seegolam, who has made clear that the primary objectives of the development of this digital currency will be to protect against Money Laundering/Combatting the Financing of Terrorism (AML/CFT) activities.

In early 2020, the Bank of Mauritius sought technical assistance from the International Monetary Fund (IMF) for the CBDC launch, becoming the first country to acquire this type of help from the Fund. Subsequent to this, the Bank of Mauritius created a sandbox to establish the base requirements of the digital currency within the local system. Additional plans have been put in place to ensure that the launch of the CBDC is done with minimal disruption to the existing financial ecosystem, through the use of a two-tier distribution model. This model will incorporate the use of the central bank during initial circulation of the digital money, with further launches planned to include interest-free CBDCs.

The Bank of Mauritius is scheduled to initiate a public consultation in June with local industry stakeholders and academics to ensure that the digital currency design is reflective of the economic environment. In the same vein, the IMF will also be pushing for a unified design of CBDCs across all countries to prevent clashes in presentation and functionality. Financial regulators will have access to the IMFs' latest handbook detailing the steps that countries must undertake when preparing for the launch of CBDCs.

Overall, the launch of CBDCs offer a major benefit for countries looking for an innovative way to tackle money laundering and fraud as well as streamlining international payments. The Bank of Mauritius' guidance of including industry players and other specialists in their research and public consultation shows that it is committed to the development of a thoughtfully designed CBDC.



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