SARB looking at electronic legal tender

Bradley Prior

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SARB looking at electronic legal tender

The SA Reserve Bank has issued an “expression of interest” document which centres around the issuance of electronic legal tender in South Africa.

The document calls on prospective solution providers to contact the SARB regarding an investigative project which will look at a “central bank digital currency”.
 

beans100

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If they get rid of real money, what will the CIT robbers steal? Will they move on to house robbery?
 

SilverCode

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Preparing for hyper-inflation I see. Don't have to worry about the cost of printing money if there is nothing to print.
 

neoprema

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Good idea if its for the people.
Bad idea if its for govt officials to loot more money...
 

Happy Days

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The war on cash continues. Once this gets approved, then physical notes will be withdrawn from circulation and everyone forced to use electronic payment methods. Then our beloved government can monitor and freeze funds as they see fit. It will also prevent you from fleeing from the country with your money in a suitcase.

Ii's already happened in Europe where Greece froze all funds and allowed only a certain amount to be withdrawn on a weekly basis. This is the inevitable outcome once fiat currency was no longer backed by something of tangible value such as gold.
 

krycor

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The war on cash continues. Once this gets approved, then physical notes will be withdrawn from circulation and everyone forced to use electronic payment methods. Then our beloved government can monitor and freeze funds as they see fit. It will also prevent you from fleeing from the country with your money in a suitcase.

Ii's already happened in Europe where Greece froze all funds and allowed only a certain amount to be withdrawn on a weekly basis. This is the inevitable outcome once fiat currency was no longer backed by something of tangible value such as gold.
US Dollar has a bigger chance this outcome at the moment..

Honestly if it is a cypto currency this is useful for offline pseudo cash payments in low value with limited risks. I'd rather have such a system with universal acceptance (well in SA) and then push to making eWallets bank agnostic and controlling the cost to transact i.e. keeping it free as per regular cash. It will remove old school theft but also introduce technical theft :p
 

Happy Days

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US Dollar has a bigger chance this outcome at the moment..

Honestly if it is a cypto currency this is useful for offline pseudo cash payments in low value with limited risks. I'd rather have such a system with universal acceptance (well in SA) and then push to making eWallets bank agnostic and controlling the cost to transact i.e. keeping it free as per regular cash. It will remove old school theft but also introduce technical theft :p
That's how they get you, man. First they persuade you that it's good for you and there will be benefit x, y & z. Then they will tell you that only people with criminal/illegal intentions will have issues with this.

We already have electronic banking and ETFs; with a growing number of people (myself included) using plastic instead of cash - so why the need for electronic legal tender? We already have fairly strict Exchange Controls and this will make it even easier to control the monetary supply. I'm not convinced at all and I know that might make me sound like a conspiracy theory nut, and that's fine with me. When you look at what's happening elsewhere, you start think that maybe the idea is not so crazy.
 

walter_l

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This can be a great thing if implemented "correctly": we can get all the features from cryptography that we have with cash, with some added benefits (faster transactions, safer than carrying cash), but given the huge potential for power/abuse, I have my doubts that that would happen.

Unless it is just as anonymous as cash (and what's the odds of that happenning?), it shouldn't replace cash.

We already have electronic banking and ETFs; with a growing number of people (myself included) using plastic instead of cash - so why the need for electronic legal tender?
Because most of the country is still "unbanked". A costless electronic currency could help the poor a lot. I have my doubts that it would be that benevolent, though.
 

Happy Days

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This can be a great thing if implemented "correctly": we can get all the features from cryptography that we have with cash, with some added benefits (faster transactions, safer than carrying cash), but given the huge potential for power/abuse, I have my doubts that that would happen.

Unless it is just as anonymous as cash (and what's the odds of that happenning?), it shouldn't replace cash.



Because most of the country is still "unbanked". A costless electronic currency could help the poor a lot. I have my doubts that it would be that benevolent, though.
In order for this work and considering it's electronic the "unbanked" will have to become banked. For it to be legal tender, it will have to be accepted everywhere and everyone must be able to use. How do you use electronic money unless you're on some system? It's like trying to reinvent the wheel.
 

walter_l

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In order for this work and considering it's electronic the "unbanked" will have to become banked.
Not necessarily. Legal tender does not require banking services, electronic or otherwise.

For it to be legal tender, it will have to be accepted everywhere and everyone must be able to use.
Agreed. That is why it cannot have costly banking as a requirement.

How do you use electronic money unless you're on some system?
That system does not need to be a banking-like one. It can be a set of offline, open standards, with cryptographic signatures and verification used to authenticate and authorise transactions.
 

smc

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Having read through the document, it appears to be aimed more at an M-Pesa style solution. There is a specific requirement for face-to-face transactions to be supported. So digital wallet style solutions are likely to be most practical. It's unlikely to cryptocurrency or blockchain, at least not in the sense of a bitcoin solution. The currency "will be issued as legal tender by the SARB only". So no point in blockchain in the sense of a public blockchain with proof-of-work, etc.

And no, it's explicitly not anonymous - "must be traceable", "must be auditable in terms of proof of issuance and ownership"
 
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