Speaking at the Strate Fintech Innovation Conference in Johannesburg, Francois Groepe of the South African Reserve Bank has said it would be too risky for them to start issuing digital currency to the population.
There is acknowledgment from the country’s government and the central bank that digital currencies, like Bitcoin, are gaining huge momentum and interest in the African country.
Groepe said that even with this boom in popularity, the central bank still needs to ensure that these payment methods are not abused or used to fund illegal activities such as money laundering.
A disruptive innovation
South Africa and its government have shown a friendliness to Bitcoin, and they are happy for the innovation to usher in a new era of banking and technology.
“We are witnessing the disruption of financial services. Over the past decade or so, fintech attention and publicity has continued to increase,” Groepe said.
Ability for mass adoption
It seems that despite the interest and the pressure, the South African Reserve Bank is not ready to make any risky moves with digital currency, despite having an optimistic view of them.
“Virtual currencies have the potential of becoming widely adopted. However, for the central bank to issue virtual curries in an open system would be too risky for us. This is something we need to really think about,” added Groepe.
The Reserve Bank has already started its practical investigation into digital currencies and Blockchain technology as in July, a Blockchain-based solutions provider, Bankymoon, had been selected by the central bank to be the sandbox business in testing out digital currency regulations.