• Madagascar launches e-Ariary pilot to modernize payments
• Designed for mobile phones and offline use, the currency supports everyday transactions
• The trial involves banks, public services, vendors, and more.

Madagascar's central bank launched a 10-month pilot program for its digital currency, the e-Ariary, on Friday, May 23, aiming to modernize the financial system and boost inclusion across the island nation. The initiative seeks to reduce reliance on physical cash, lower transaction costs, improve financial traceability, and expand access to financial services, particularly in rural areas.

"We hope that, by the end of this process, the use of banknotes will decline, as managing them is very expensive for the Central Bank," said Aivo Andrianarivelo, Governor of the Central Bank of Madagascar. He noted that the 100 Ariary note, equivalent to about $0.022, does not even cover its printing cost and has a short lifespan of approximately six months, requiring frequent replacement that Madagascar cannot undertake domestically.

The e-Ariary is designed for broad accessibility, usable via smartphones, basic mobile phones, and offline methods such as QR codes, smart cards, and point-of-sale terminals. Its primary applications will include everyday transactions like merchant payments, transportation fares, salary disbursements, and social transfers, with an emphasis on affordability for all users.

The digital currency is intended to complement, rather than replace, existing financial tools, particularly mobile money platforms, which will continue operating in parallel. In 2023, Madagascar recorded over 10 million mobile money accounts, significantly outnumbering the 3 million traditional bank accounts. Mobile money platforms facilitated nearly 342 million transactions totaling 38,161 billion Ariary (approximately $8.5 billion USD), underscoring the increasing prominence of digital services in the country's financial landscape.

The pilot program will rigorously test the technical infrastructure, transaction security, and priority use cases of the e-Ariary. It will also assess the digital currency’s broader socio-economic impact. A diverse group of stakeholders is participating in the trial, including commercial banks, microfinance institutions, state-run entities such as the utility company Jirama, market vendors, the Treasury, and the tax administration.

Central to the rollout will be extensive user awareness campaigns, as public understanding and confidence are considered vital for the successful adoption of the e-Ariary. If successful, the project is expected to usher in a new era of digital payments in Madagascar, establishing a more inclusive, transparent, and interoperable financial ecosystem while supporting ongoing efforts to formalize the economy.

By Samira Njoya,

Editing by Sèna D. B. de Sodji