South Africa is the youngest country to study the possibility of creating its own sovereign digital currency.
According to a statement released on Tuesday The Reserve Bank of South Africa has started preliminary feasibility studies on the “attractiveness and desirability” of a digital currency from a central bank for retail customers.
As part of your advertising, The SARB defined a retail customer CBDC as a sovereign cashless digital currency issued by the central bank that is suitable for electronic payments.
“The aim of the feasibility study is to examine how the issuance of a general purpose CBDC is incorporated into the political position and mandate of the SARB,” said the Central Bank of South Africa in its announcement.
According to the SARB The preliminary study will focus on issues related to a possible issuance of a CBDC for retailers in South Africa:
“The feasibility study will include hands-on experimentation on various emerging technology platforms, taking into account a variety of factors, including the policy, regulatory, safety and risk management implications.”
The South African CBDC study is expected to last until 2022 and may be in line with the existing institutional pilot project for digital payments under the aegis of the “Khokha Project”.
Like other central banks currently studying CBDCs, The SARB also stated that its current exploratory studies are in no way indicative of any plans to issue a digital edge in the future.
In June 2018, the SARB launched a pilot project for the Khokha project, the country’s symbolized fiat interbank payment system. As Cointelegraph has already reported, the project uses the Ethereum-based quorum infrastructure to test digital clearing and settlement of interbank payments.
The global field of CBDCs continues to grow, with China being the de facto market leader, at least among the major economies. In South Korea, the country’s central bank recently announced plans to partner with a technology company to build a sovereign digital currency for their test protocols, which are set to begin in August.