The South African Reserve Bank (SARB) has launched a feasibility study into the introduction of a central bank digital currency (CBDC) as “digital cash”.
SARB said the CBDC would be a form of electronic legal tender aimed at providing “the best attributes of both cash and electronic payments”.
The SARB study will investigate the feasibility, desirability, and appropriateness of a CBDC for general-purpose retail use, complementary to cash.
“The SARB is one of a growing number of central banks looking at the feasibility of the issuance of digital currencies,” it said.
The objective of the study is to consider how a general-purpose CBDC will feed into SARB’s policy position and mandate.
It will include practical experimentation across different emerging technology platforms.
It will take into account a variety of factors – including policy, regulatory, security and risk management implications.
SARB added that the CBDC study is different from Project Khokha, which is focused on the settling of high-value transactions between commercial banks and other stakeholders at the wholesale level.
However, it is expected that these two studies would result in better policy alignment and coordination, it added.
The CBDC feasibility study is expected to be concluded by next year, SARB said.