Digital Land It could reduce the high cost of cross-border payments for banks, but its introduction is still a few years away, a senior central bank official said.
However, regulations on crypto assets have begun and could come into force within the next 9 to 15 months, Kuben Naidoo, vice president of the Reserve Bank, said in an interview.
According to a 2021 World Bank report, remittances from South Africa to other countries cost 13% of the transaction, more than double the average of the G20’s major global economies.
Remittances to South Africa cost 6.2%.
Some countries are planning to introduce an electronic version of the traditional currency known as the Central Bank Digital Currency (CBDC), studying how the underlying technology can be used.
China’s original digital project is one of the most advanced of the great powers, but central banks from the euro area to the United States are at various stages of CBDC research.
Last year, the central bank of Nigeria introduced eNaira for use by the general public.
South Africa conducted a small experiment at the Wholesale CBDC and participated in a cross-border pilot with the Central Bank of Malaysia, Australia and Singapore. The next step is for regulatory agencies to test Digital Land on a larger scale and develop rules for its use.
“We are still learning, we are still experimenting,” Naidoo said.
Regulation
Meanwhile, Naidoo said the Reserve Bank wants to regulate crypto assets to prevent theft, money laundering and monetary policy collapse, and hopes they will be implemented within the next 15 months. ..
“If crypto assets become a very ubiquitous currency, it could undermine the power of central banks,” he said. — — Rachel Savage and Promit Mukazy, (c) 2022 Reuters
