South Africa’s Central Bank Says No ‘strong Immediate Need’ For Cbdc

The South African Reserve Bank found no short-term need for a retail CBDC, saying wholesale or cross-border uses should be explored instead.

The South African Reserve Bank says it doesn’t see a need for a central bank digital currency in the near term, instead saying the country should modernize its payments system.

The South African central bank said in a paper released on Thursday that there was no “strong immediate need” for a retail CBDC, though deploying one was technically feasible.

It said that existing initiatives, such as a program to modernize the payments system and expand non-bank participation in the national payment system, should remain the priority for now.

The central bank will shift its focus toward exploring wholesale CBDC applications and cross-border payment efficiency, while continuing to monitor retail CBDC developments, it stated.

The research examined whether a retail CBDC would address gaps in South Africa’s payment system, revealing that challenges persist as roughly 16% of adults remain unbanked.

Related: South Africa’s central bank flags crypto, stablecoins as financial risk

South Africa has turned against crypto recently, with a warning from its central bank about crypto and stablecoins.

In a report released earlier this week, the SARB flagged “crypto assets and stablecoins” as a new risk for technology-enabled financial innovation.

The bank also cautioned that crypto can be used to circumvent Exchange Control Regulations, which control the inflows and outflows of funds to South Africa.

Source: CoinTelegraph