South Africa is the latest country to explore the possibility of creating its own sovereign digital currency.
According to a release Was released On Tuesday, the South African Reserve Bank has begun a preliminary feasibility study about the “desirability and suitability” of the retail central bank digital currency.
As part of its announcement, the SARB defined a retail CBDC as a cash-supplement sovereign digital currency issued by a central bank suitable for electronic payments.
The central bank of South Africa said in its announcement, “The purpose of the feasibility study is to consider how the issuance of CBDC will affect the policy position and mandate of the SARB.”
According to SARB, the initial study will focus on potential CBDC issuance issues for retail use in South Africa:
“Feasibility studies will include practical experiments in various emerging technology platforms, taking into account various factors including policy, regulatory, security and risk management implications.”
The CBDC study of South Africa is expected to run until 2022 and potentially align with the existing institutional digital payment pilot under the auspices of the “Khokha Project”.
Like other central banks currently studying CBDC, the SARB also stated that its current exploratory studies were in no way indicative of plans to issue digital rand in the future.
Back in June 2018, SARB launches a pilot test for Project Khokha – The country’s tokenized Fiat interbank payment system. As previously reported by Cointegraph, The project uses Ethereum-based quorum infrastructure Testing digital clearing and settlement for interbank payments.
As the global CBDC sector continues to expand, China is seen as the de facto leader – at least in major economies. In South Korea, the country’s central bank recently announced plans Partner with a technology firm To create a sovereign digital currency for its test protocol starting in August.