The South African Reserve Bank (SARB) said it has initiated a feasibility study for the general-purpose retail central bank digital currency (CBDC). The study, which SARB expects to conclude in 2022, will focus on the issuance of a domestic CBDC that can be used by consumers in South Africa for general retail purposes.
Study to focus on retail CBDC
In Statement Released on May 25, 2021, the central bank states that the feasibility study will include practical experiments in various emerging technology platforms. The study will take into account various factors including policy, regulatory, security and risk management implications.
Nevertheless, the statement makes it clear that this latest study will be different from the previous one. The statement states:
It should be noted that the CBDC feasibility study is different from Project Khokha, which focuses on the settlement of high value transactions between commercial banks and other stakeholders at the wholesale level, it is expected that both studies will result in better policy alignment. . And coordination.
However, SARB has underestimated the possibility of launching a digital currency in the near future. It said it had “not taken any decision to issue a retail CBDC.”
Mandate of CBDC and SARB
In 2017, SARB created a simulation (Project Khokha) to assess whether payment performance, scale, and privacy are possible using the Ethereum blockchain technology. This simulation Allegedly “Transaction performance target exceeded 70,000 transactions in less than two hours.”
Additionally, the simulation achieved “95% block propagation time in less than 1 second and 99% propagation in less than 2 seconds.” The results demonstrated that “acceptable performance can be achieved regardless of the geographic distribution of the banks’ hardware.” Regarding its latest feasibility study, the SARB states that it will also consider how the issuance of a general-purpose CBDC will affect the policy position and mandate of the central bank.
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