Following on from news late last year that the South African Reserve Bank was seeking to tax and track Bitcoin trades, the regulator has now announced a newly launched FinTech programme which will seek to evaluate assess the impact – and potential regulatory requirements – of newer financial technologies such as cryptocurrencies.
According to the Reserve Bank, the programme will launch with three objectives; the first will see the review of private cryptocurrencies, which will, in turn, inform ‘an appropriate policy framework and regulatory regime’.
The Reserve Bank offered that established policies, once cemented in the latter half of the year, will address issues such as “clearing and settlement risks, exchange control impacts, monetary policy and financial stability, and other matters such as cybersecurity considerations.”
Secondly, the Reserve Bank aims to investigate the ‘applicability’ of innovation facilitators such as hubs and accelerators, and aims to assist the consideration of new applicants in a sandbox setting.
Loerien Gamaroff – the CEO of a blockchain-based solutions provider named Bankymoon – recently offered that his company is presently in talks with the Reserve Bank and has been selected as a sandbox business within which to trial new regulations.
Finally, the third objective would launch ‘Project Khoka’ – a new initiative which will experiment with distributed ledger technologies. The project will usher in a proof of concept, wherein interbank clearing and settlement through distributed ledger technology will be assessed.
The proof of concept will specifically trial wholesale payments leveraging Quorum, which is a private, permissioned version of the Ethereum network founded by JPMorgan.
The South African Reserve Bank has partnered with ConsenSys, where the two will work to establish both the design and setup of the proof of concept.
The Reserve Bank was eager to note, however, that the launch of the FinTech Programme does not signify a ‘radical move’ to distributed ledger technology, but is rather a ‘structured approach to understand the implication of using a tokenized asset on distributed ledger technology to transfer value’.
The Reserve Bank will release its findings in the second half of 2018.
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