The SA Reserve Bank (SARB) has released a statement on its position regarding a electronic legal tender in South Africa.
The SARB issued an Expression of Interest document last week which outlined its examination of the use of digital currency, and it has now said it plans to move forward with its experimentation with the project.
“Following the issuance of an Expression of Interest document, and a positive response from interested parties, the South African Reserve Bank is in the process of engaging with possible vendors to explore the feasibility of a central bank digital currency (CBDC) as electronic legal tender (ELT),” the Reserve Bank said.
The SARB’s Currency Management Department has been researching the potential for an electronic legal tender since 2016. This would be a domestic, general purpose central bank digital currency issued and backed by the SARB.
Until now, the research by the Reserve Bank has been conducted to understand the implications of electronic legal tender.
However, the next phase of the development is testing the use cases for this technology and analysing its impact within various environments.
“The intent is to experiment with at least three different designs and/or deployment models during 2019,” the SARB said.
“Final outcomes from the experimentation will be used as input to determine the SARB’s position on CBDC as ELT.”