The South African Reserve Bank (SARB) is actively experimenting with digital currency and distributed-ledger technology, but this cannot be done in isolation from the wider financial industry, says governor Lesetja Kganyago.
Kganyago was speaking on the findings of Project Khokha 2 on Wednesday (6 April) – a project which aims to explore the use of tokenised money, blockchains and digital currency in South Africa.
A distributed ledger is a digital record of transactions and contracts maintained in a decentralized form across different locations. The technology underpins cryptocurrencies such as Bitcoin and is being experimented with in large parts of the global financial system.
DLTs are currently most closely associated with blockchains – the system underpinning cryptocurrencies like Bitcoin. However, blockchain technology is only one type of application of DLTs.
“We recognise that digital currency innovation cannot be explored in isolation. The SARB continues to draw on the insights emerging from various initiatives, including (but not limited to) our ongoing study into the feasibility, desirability and appropriateness of a retail central bank digital currency (CBDC), to enrich our understanding of digital currency implications.”
US federal reserve Chair Jerome Powell outlined four qualities a hypothetical digital currency in the US must have while adding that no final decision has been made on whether to proceed with creating one.
US central bankers are conducting research and experiments with digital currencies though Powell has stopped short of recommending a digital dollar, saying such a move would need more input from US lawmakers and stakeholders.-bustech
