The adoption rate of cryptocurrency in Nigeria hits new highs and the price of Bitcoin has hit a more than 60% premium.
The bank of South Africa is the most recent to begin looking at the possibility of a national cryptocurrency A central bank digital currency (CBDC). According to a press release from the Reserve Bank of South Africa, the country will commence preliminary studies regarding how feasible a digital currency could be in the African nation.
As per the announcement, the Reserve Bank will be investigating the feasibility, desirability and appropriateness of a South African CBDC as legal tender in the country to complement cash. The study will see how digital cash might be able to work hand in hand with the traditional finance system to offer the best of both cash and electronic payments. The South African Reserve Bank will focus on investigating how a CBDC might impact the system in retail use in the country. As the announcement noted:
The objective of the feasibility study is to consider how the issuance of a general-purpose CBDC wCBDC will feed into the SARB’s policy position and mandate. The SARB is one of a growing number of central banks looking at the feasibility of the issuance of digital currencies.
According to the bank, the initial investigation will concentrate on looking at how practical implementation might impact the retail space. The feasibility study will implement the technology across industries with a number of factors considered and studied:
“The study will focus on the issuance of a domestic CBDC that can be used by consumers in South Africa for general retail purposes. The feasibility study will include practical experimentation across different emerging technology platforms, taking into account a variety of factors, including policy, regulatory, security and risk management implications.”
According to the bank, the investigation is set to launch and conclude sometime next year – although finer details were not mentioned. At present, the South African Bank has noted that this does not mean a CBDC will be confirmed or issued and the decision will be made based on the results of the study.