The South African Reserve Bank is studying the benefits of issuing a digital currency for general retail purposes, it said on Tuesday, in line with several other central banks.
A central bank digital currency, or CBDC, is a form of electronic cash linked to the sovereign currency on a one-to-one basis, with its value protected by the central banks’ monetary policy and inflation-targeting regime.
It would allow businesses and individuals to make electronic payments directly backed by the Bank.
The Reserve Bank said it would “investigate the feasibility, desirability and appropriateness of a CBDC as electronic legal tender, for general-purpose retail use, complementary to cash.”
The objective of the study is to consider how the issuance of a general-purpose CBDC would feed into the Bank’s policy position and mandate, it said.
The study, to be concluded in 2022, will include practical experimentation across different emerging technology platforms, taking into account a variety of factors, including policy, regulatory, security and risk management implications. — Reported by Promit Mukherjee, (c) 2021 Reuters