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South Africa's Central Bank Starts Research on Retail-Focused Digital Currency
The South African Reserve Bank said it will carry out trials on different technology platforms for the study.
Updated Sep 14, 2021, 1:01 p.m. Published May 25, 2021, 12:21 p.m.
A feasibility study from the South African Reserve Bank (SARB) will examine the pros and cons of a central bank digital currency (CBDC).
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- In an announcement Tuesday, SARB said the work would look at the "feasibility, desirability and appropriateness" of a retail CBDC as legal tender.
- It would be focused on a digital rand used to complement cash.
- The overriding purpose of the study is to see if the potential issuance of the general-purpose retail CBDC would align with SARB's mandate and policies as central bank.
- Practical experiments will take place on unnamed "different emerging technology platforms" and gauge any implications for policy, regulation security, risk management and other factors.
- The central bank has been working on a blockchain-based system for interbank clearance and settlement since at least 2018, claiming in that year to have had spectacular success with a proof-of-concept project.
- Around the same time, SARB said it was to trial the Quorum blockchain (then owned by JPMorgan) in interbank clearing and settlement.
- A number of other central banks globally are also looking into potential retail CBDC launches, with blockchain infrastructure firm Bison Trails recently putting the number at 80%.
Also read: Opinion: A Central Bank Digital Currency Would Be Bad for the US
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