The South African Reserve Bank is Considering Launching its Own Digital (Rand) Currency.
The South African Reserve Bank (Sarb) recently announced that it is commencing a feasibility study for a general-purpose retail Central Bank Digital Currencies (CBDC).
“The Sarb has embarked on a study to investigate the feasibility, desirability and appropriateness of a CBDC as electronic legal tender, for general-purpose retail use, complementary to cash,” says the Reserve Bank in a statement.
“A retail CBDC can be defined as a digital form of cash aimed at providing the best attributes of both cash and electronic payments.
“The objective of the feasibility study is to consider how the issuance of a general-purpose CBDC will feed into the Sarb’s policy position and mandate.”
The study will focus on the issuance of a domestic CBDC that can be used by consumers in SA for general retail purposes.
Simon Dingle, Fintech entrepreneur and crypto expert had this to say while speaking to Bruce Whitfield on 702’s Money Show…
“They’re looking at essentially creating a digital rand… It’s antithetical to cryptocurrencies like Bitcoin – it’s the opposite of what Bitcoin is,” Simon Dingle, Fintech entrepreneur and crypto expert
Dingle says it comes down to an ideological discussion with decentralisation and privacy at its core. He describes how the system would differ from conventional banking.
“Picture a future in which you no longer require intermediary banks. You essentially have an account directly with the state – they have full control and sight of everything happening in your account,” Simon Dingle, Fintech entrepreneur and crypto expert.
The Central Bank of China will be able to track citizens’ purchases in real time.
“The digital yuan is both programmable and trackable, giving the Chinese government enormous control over the economy. Not only will Chinese policymakers know every consumer choice made in the economy, but they could also directly affect spending behaviour by making the currency expirable by a certain date,” said Boris Schlossberg, MD of forex at BK Asset Management, according to Bitcoin.com.
Dingle believes central banks are aiming to align with technological trends and not necessarily perceiving their own digital currencies as antithetical to what’s happening in the world of Bitcoin.
“There’s a lot to be said about the employment of a technology that was designed to enable trust in the network where there aren’t any central authorities – using that same technology where you have a central authority is kind of pointless,” Simon Dingle, Fintech entrepreneur.
Simon is cautious and concern about the move by central bank because they want to maintain a control.
“My concern is where this leads us… Much of your money is already digital but it still resides in a banking system… The kind of central bank digital currencies being imagined now really remove the requirement for intermediaries and envision you banking directly with the state, which states would love for many reasons,” Simon Dingle, Fintech entrepreneur and crypto expert.