South Africa considering adopting digital currency

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The Reserve Bank of South Africa has revealed that it is considering issuing a national digital currency, with Blockchain or Distributed Ledger Technology (DLT) being what it is based on.

According to Tim Masela, head of the National Payments System at the South African Reserve Bank(SARB), the objective would be to take advantage of emerging technologies so that they reap the benefits.

SARB is at the moment monitoring other countries which have issued fiat currencies, which offer similar benefits and conveniences to crypto-currencies, in a digital format.

They will carry out their own experiments and evaluations to determine whether such offerings would be appropriate for South Africa.

Tim Masela said that the potential benefits of a national digital currency include the convenience of use, greater inclusion due to its reach, real-time settlements and a reduced cost of use.

“We foresee that these benefits could be realised, which would be good for the transacting public. But of course, the risks have to be borne in mind as well and that’s what we want to balance,” he said.

Concerning the risks,he talked about cyber-attacks and the unregulated nature of the emerging business models.

Crypto-currencies are not considered a significant threats to financial stability, price stability or the national payments system as they are not widely used. As such, the Sarb does not regulate cryptocurrencies but reserves the right to do so.

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