The South African Reserve Bank found no short-term need for a retail CBDC, saying wholesale or cross-border uses should be explored instead.
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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 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.
“While the SARB does not currently advocate for the implementation of a retail CBDC, it will continue to monitor developments and will remain prepared to act should the need arise.”
The central bank will shift its focus toward exploring applications and cross-border payment efficiency, while continuing to monitor retail CBDC developments, it stated.
Central bank issues crypto and stablecoin warning
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.
For a CBDC to succeed, it would need to match or exceed the benefits of cash, including offline functionality, universal acceptance, low costs, ease of use, and privacy features, it stated.
Related:
South Africa has turned against crypto recently, with a warning from its central bank about crypto and stablecoins.
In a report 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 .
CBDC race continues across the globe
Only three countries have officially launched a CBDC: , Jamaica and the Bahamas, to the Atlantic Council CBDC Tracker.
There are 49 countries that have CBDCs in a pilot testing phase, 20 countries actively developing one, and 36 countries are researching a CBDC. Meanwhile, the United States its CBDC plans under the Trump administration.
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