South Africa is the latest country to begin exploring the possibility of creating its own sovereign digital currency.
According to a release issued on Tuesday, the South African Reserve Bank has begun preliminary feasibility studies about the “desirability and appropriateness” of a retail central bank digital currency.
As part of its announcement, the SARB defined a retail CBDC as a cash-complimentary sovereign digital currency issued by the central bank suitable for 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,” South Africa’s central bank stated in its announcement.
According to the SARB, the preliminary study will focus on issues surrounding a potential CBDC issuance for retail use in South Africa:
“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.”
South Africa’s CBDC study is expected to last until 2022 and will potentially align with the existing institutional digital payments pilot under the aegis of “Project Khokha.”
Like other central banks currently studying CBDCs, the SARB also stated that its current exploratory studies were in no way an indication of plans to issue a digital rand in the future.
Back in June 2018, the SARB launched a pilot test for Project Khokha — the country’s tokenized fiat interbank payment system. As previously reported by Cointelegraph, the project utilizes the Ethereum-based Quorum infrastructure to test digital clearing and settlements for interbank payments.
The global CBDC field continues to expand with China seen as the de facto leader, at least among the major economies. In South Korea, the country’s central bank recently announced plans to partner with a technology firm to build a sovereign digital currency for its testing protocols scheduled to begin in August.