The South African Reserve Bank (SARB) stated that it has begun a feasibility study for the Universal Retail Central Bank Digital Currency (CBDC). The SARB study, which is expected to be completed in 2022, will focus on the issuance of domestic CBDC, which consumers in South Africa can use for general retail purposes.

Research focuses on retail CBDC

In a statement issued on May 25, 2021, the Central Bank said that the feasibility study will include practical trials across different emerging technology platforms. The study will consider a variety of factors, including the impact of policies, regulations, security and risk management.

The statement still states that this latest research will be different from previous research. The statement stated:

It should be noted that although the CBDC feasibility study is different from the Khokha project, which focuses on the settlement of high-value transactions between wholesale first-tier commercial banks and other stakeholders, these two studies are expected to make policies better Coordination. And coordination.

However, SARB has downplayed the possibility of it launching a digital currency in the near future. It stated that “the decision to issue a retail CBDC has not yet been made.”

Authorization of CBDC and SARB

In 2017, SARB created a simulation (Project Khokha) to evaluate whether it is possible to achieve the performance, scale and confidentiality of payments using Ethereum blockchain technology. According to reports, the simulation “exceeded the transaction performance target of 70,000 transactions in less than two hours.”

In addition, the simulation also realized that “95% of the blocks were propagated in less than 1 second, and 99% of the blocks were propagated in less than 2 seconds.” The results show that “although the geographical distribution of bank hardware varies, acceptable performance can still be achieved.” Regarding its latest feasibility study, SARB stated that it will also consider how the issuance of a general-purpose CBDC will affect the central bank’s policy stance And tasks.

See also  Paypal's Venmo initiates crypto transactions for 70 million users buying and selling cryptocurrencies – News Bitcoin News

What is your opinion on SARB’s latest feasibility study on CBDC? You can share your views in the comments section below.

Tags in this story

Central Bank Digital Currency, Digital Currency, Digital Currency Central Bank, Economics, Ethereum Blockchain, Feasibility Study, High Value Transaction, Khokha Project, South Africa, South African Reserve Bank, Transaction Performance

Picture Credits: Shutterstock, Pixabay, Wiki Commons