Accelerating de-dollarization! Congo: Beginning April next year, US dollar cash transactions will be banned.

Accelerating de-dollarization! Congo: Beginning April next year, US dollar cash transactions will be banned.

The Democratic Republic of Congo has announced it will restrict cash dollar transactions starting next April, marking a key step toward de-dollarization for this highly dollarized African economy.

DRC central bank governor Andre Wameso announced the plan during the IMF and World Bank Spring Meetings in Washington, stating that the move aims to combat money laundering and boost confidence in the local currency. Dollar bank accounts will be retained, but related payments will shift to electronic channels, with a one-year transition period and potential amnesty measures to encourage cash deposits into the banking system.

The policy is being implemented against the backdrop of the Congolese franc's strong performance in recent years—appreciating nearly 30% against the US dollar throughout 2025. However, Alexander Venter, an economist at Oxford Economics, pointed out that given DRC’s largely informal, cash-based economy and weak public confidence in the local currency, “the implementation risks are high.”

Policy Framework: Electronic Alternatives to Cash

The degree of dollarization in Congo’s economy is among the highest in the world. IMF data shows that about 90% of the country’s bank deposits and over 97% of loans are denominated in US dollars, rooted in the historical trauma of hyperinflation in the 1990s.

Wameso stated that commercial banks receive billions of dollars in cash every year, but only a small portion remains on the books. “This means the dollars we import do not stay in the formal economic system,” he said. “Many funds may flow toward neighboring countries where dollars are scarce, which seriously challenges fund traceability.”

According to the plan, cash dollar transactions will be restricted, but dollar bank accounts themselves will not be affected. Payment channels will be forced to switch to electronic methods, and authorities have set a one-year transition period, with possible amnesty mechanisms to encourage citizens to deposit their cash dollars in banks.

To facilitate this transition, the central bank has approved several fintech companies to enter the market and has partnered with Visa Inc. and Mastercard Inc. to expand payment options. Last week, the central bank also issued six-month government bonds, with the first auction issuing 100 billion Congolese francs’ worth of bonds, three-quarters of which were successfully sold to support the local currency’s exchange rate. “This tells us that market participants expect sustained stability,” said Wameso.

This policy adjustment is also driven by international regulatory pressure. DRC is currently on the Financial Action Task Force (FATF) “gray list”—which now covers over 20 countries. Being on this list can harm sovereign credit ratings and threaten integration into the global banking network. Wameso said the initiatives are aimed at strengthening supervision, expanding banking system coverage, and aligning DRC with international anti-money laundering standards to remove the “gray list” tag.

From a regional perspective, DRC’s move is not unique. Tanzania, Zambia, and other African countries have recently tightened dollar usage controls, mandating local currency settlements for transactions. Congo’s inclusion in this trend reflects the continent’s overarching stance on monetary sovereignty.

The continued strengthening of the Congolese franc has provided important support for these reforms. Earlier this month, the Congolese government completed its first euro bond issuance, raising $1.25 billion—with a 5-year coupon at 8.75% and a 10-year coupon at 9.5%. The issuance succeeded despite challenges from surging oil prices due to Middle East conflict and ongoing rebellions in the eastern provinces.

“If the market is willing to buy Congo’s 10-year bonds, it means the market is betting on peace,” Wameso said. Last weekend, the Congolese government reached an agreement with Rwanda-backed M23 militants to advance the peace process, including prisoner exchanges. Congo’s economy relies heavily on mining, especially copper.

Gold Reserve Plan on the Agenda

Wameso also revealed that the central bank is actively advancing plans to bolster gold reserves using domestic production to strengthen its foreign exchange buffer capacity. The central bank is working with state-owned DRC Gold Trading SA to identify ethically sourced artisanal gold and is evaluating certified refiners in Switzerland, the UAE, and Singapore.

Additionally, he stated that the central bank revised bank equity requirements last year. Previously, banks were required to have four shareholders each holding at least 15%. Now, shareholder number, shareholding ratio, and exemption arrangements are determined on a case-by-case basis.

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