The South African Reserve Bank (SARB) has embarked on a study to investigate the feasibility, desirability and appropriateness of a central bank digital currency (CBDC).<\/p>\n
In a statement on Tuesday (25 May), the central bank said that the study will look at the feasibility of using the CBDC\u00a0as electronic legal tender, for general-purpose retail use, complementary to cash.<\/p>\n
A retail CBDC can be defined as a digital form of cash aimed at providing the best attributes of both cash and electronic payments, it said.<\/p>\n
“The objective of the feasibility study is to consider how the issuance of a general-purpose CBDC will feed into the SARB\u2019s policy position and mandate. The SARB is one of a growing number of central banks looking at the feasibility of the issuance of digital currencies.”<\/p>\n
The SARB said that the study will focus on the issuance of a domestic CBDC that can be used by consumers in South Africa for general retail purposes.<\/p>\n
“The feasibility study will include practical experimentation across different emerging technology platforms, taking into account a variety of factors, including policy, regulatory, security and risk management implications.”<\/p>\n
“It should be noted that while the CBDC feasibility study is different from Project Khokha, which focuses on the settlement of high-value transactions between commercial banks and other stakeholders at the wholesale level, it is expected that the two studies will result in better policy alignment and coordination. ”<\/p>\n