South African Central Bank Opens up to Cryptocurrencies and Blockchain

The South African Reserve Bank (Sarb) is open to the idea of issuing a national digital currency based on Blockchain or Distributed Ledger Technology (DLT), this is according to a report by MoneyWeb.

Head of National Payments System at Sarb, Tim Masela said that “If we go the route of issuing a digital currency, the objective would be to take advantage of emerging technologies so that we reap the benefits.”

According to BusinessTech, Africa is leading the way in rolling out successful national digital currencies, as Tunisia and soon Senegal will both have their own versions of digital national currencies. This has highlighted the benefits of using cryptocurrencies.

The success has not gone unnoticed in South Africa. These digital currencies work, they provide a convenient real time solution that will allow for greater inclusion due its reach, all while at a reduced cost, said Masela.

There are however clear risks and threats that are involved in adopting such a system. These threats such as cyber-attacks and the unregulated nature of the currencies has raised concerns for the central bank. “The proponents of the technology say ‘you don’t need to regulate it; it will self-regulate’. We don’t have an idea of how that will happen, we still need to reflect on this and need a good case [to show] that it can self-regulate. Otherwise, we believe that if it is not regulated and things go wrong, it could have a spillover effect into the financial systems,” Masela said.

Although the SARB is yet to determine a firm stance on cryptocurrencies they are open to further investigating the issue, Masela concluded.