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SARB and National Treasury Considering Digital Currency as a form of Payment

SARB and National Treasury Considering Digital Currency as a form of Payment image

SARB and National Treasury Insight

South Africa’s Reserve Bank (SARB) and the country’s National Treasury are considering cryptocurrencies as part of the National Payment System (NPS), both parties have been discussing the potential implementation of adding a new mechanism to their current payment system in the state.

 

Legislators are looking forward to updating the outmoded notional payment system which was implemented in 1998. The commissioners are now invited all interested parties to discuss the ideas as for how the new bill can now be improved with the use of the available new technologies. Right now, the regulators are paying special efforts and interests in advanced virtual technologies, precisely on the Blockchain technology. Both parties are focusing their attention on digital currencies and distributed ledger technology.  

 

South Africa’s Regulatory Organizations

South Africa’s National Payment System (NPS) is considered as “one of the pillars of financial stability of the state economic system,” and South Africa’s Reserve Bank (SARB) is responsible for the safety and reliability of the system, and also, including the implementation of risk-reduction measures in the payment system itself to avoid or decrease systemic risk.

 

As mentioned above, the system was first adopted in 1998 and it’s now viewed as outdated by legislators and considered to undergo for a system modification including the Distributed Ledger Technology (DLT).

 

The authorities and common citizens of the state showing a prominent interest in digital technologies mainly in its advancement of Blockchain Technology. Based from the collected data, SARB has previously conducted a multi-bank testing of bank-to-bank transfers by adopting the innovative digital technologies in cooperating with eight banks which includes, Absa, Capitec, Discovery, Investment, FirstRand, NedBank, and Standard Bank.

 

The SARB offer an “Inter-Bank Settlement Service” by the help of “Project Khokha [1]” through emulating parts of the Reserve Bank’s real-time electronic settlement system, known as The South African Multiple Option Settlement System (SAMOS) – Project Khokha was introduced early this year 2018 to examine the use of DLT as a system for processing secure payments using “Quorum,” an Ethereum Blockchain-based System.

 

This new SARB measure describes the state's determination to merge Blockchain technology in the country's fiscal system and bring digital technology at the forefront of the modernizing of current payment systems in South Africa.

 

As expected early next year on February 2019, SARB together with regulators and the National Treasury will provide responses after making necessary examination about the legislative proposals for modifying the current system, this is according by ‘BTCwires.com’ as stated [2] below:

“South Africa’s Reserve Bank, in a joint statement with National Treasury, stressed about the era of innovative digital technology embracing the payment industry like never before, while challenging the traditional system. Financial regulators are open to the remarks as well as recommendations by the end of February in next year.”

 

Link:

[1] “South African Reserve Bank blockchain project a huge success” (Link). mybroadband.co.za Retrieved on December 11, 2018

[2] “Joint Statement of SARB and National Treasury” (Link). btcwires.com Retrieved on December 11, 2018

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