Directives governing tokenized deposits and crypto assets are likely to become effective on Jan. 1, 2025, a senior fintech analyst at the South African central bank has revealed. However, according to the analyst, regulators are still trying to understand or learn the risks that come with using distributed ledger technology.
To achieve this, the SARB and its partners have conducted experiments whose objective was to understand and identify the risks as well as the benefits of distributed ledger technology (DLT). Project Khokha and Project Khokha 2 are among the experiments that were conducted by the South African central bank in conjunction with commercial banks.
In one of the experiments, the SARB is said to have explored a general-purpose retail central bank digital currency (CBDC). The South African central bank similarly explored wholesale and multi-CBDCs and according to Deventer, the bank is now interested in finding a way forward.
Also Read: South Africa Mandates Risk Warnings On Crypto Adverts With New Advert Regulatory Code.
“At the SARB, we recently completed a project that explored the feasibility, desirability and appropriateness of a retail CBDC for South Africa. We are currently progressing with an internal project to consider the way forward,” the fintech analyst said.
However, according to a report published in Creamer Media’s Engineering News, South African regulators; the SARB and the Financial Sector Conduct Authority (FSCA) as well as the financial industry still need to do more work on the prudential treatment of crypto assets.
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