South Africa’s Reserve Bank intentions to issue an electronic legal tender to the public. They have issued an “expression of interest” document that centres around the afore-mentioned intentions. The document calls on all interested solution providers to submit an investigative project that will bore the central bank’s digital currency to SARB.
According to the Central Bank, the digital currency core project was mandated in 2006 by the Currency Management Department of SARB. The project had two focus; research and development of a set of cases applicable to the intended feasibility project.
The digital current feasibility project will be carried out in an innovation lab environment. It will cover the following:
Validate the feasibility of proposed technical solutions, enhance the body of knowledge, and extend participation to selected banks and mobile network operators (payment service providers and niche technology providers).
The currency will either be issued by SARB or be backed by SARB with regulatory standards and interoperability requirements. The supply of the currency will be limited and determined by the applicable monetary policy. It will only be issued to commercial banks and licensed service providers at a one-to-one equivalence with the rand.
Customers must be able to own and transact with the digital currency without requiring a bank account. Consumers and businesses must be provided with channels to obtain or return the currency exchange for cash. The expression of interest will close on the 6th of June 2019.
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