Central Banks

The South African Reserve Bank starts study into retail digital currency

  • The SA Reserve Bank has begun an investigation into the feasibility, desirability and appropriateness of a central bank digital currency
  • It's not the first time the bank has been working with blockchain technology
  • A lot of countries have stated they are interested in issuing a CBDC

The South African Reserve Bank (SARB)  announced that the study is to examine the pros and cons of a central bank digital currency (CBDC).

Investigation into appropriateness of a central bank digital currency

The SA Reserve Bank has begun an investigation into the feasibility, desirability and appropriateness of a central bank digital currency.

The study will include practical experiments across different unnamed emerging technology platforms. They will take into account a variety of factors, including policy, regulatory, security and risk management implications. According to the statement, the CBDC feasibility study is expected to be concluded in 2022.

Not the first time SARB is interested in crypto

It’s not the first time the bank has been working with blockchain technology. In 2018, they were participating in Project Khokha, which replicated interbank clearing and settlements using a blockchain network. Earlier this year there came an update on this project. The working group announced the second phase of the project. This phase will issue, clear and settle debentures — a type of debt instrument companies issue to raise capital — on a distributed ledger using tokenized money.

Central bank digital currencies are becoming popular 

A lot of countries have stated they are interested in issuing a CBDC. Most are busy studying the possibilities or are about to launch CBDC pilot programs.

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