The use of cryptocurrencies as legal tender is one of the most discussed topics among the cryptocurrency community members. The very thing may soon happen in South Africa.
One of the South African financial magazines has recently reported about the willingness of the South African Reserve Bank to issue digital version of its fiat currency. The new currency referred to as the “national digital currency” is expected to be based on blockchain technology.
The publication, in its article, quotes the Head of National Payments System at the South African Reserve Bank — Tim Masela saying,
“If we go the route of issuing a digital currency, the objective would be to take advantage of emerging technologies so that we reap the benefits.”
The “emerging technologies” in Masela’s quote refers to blockchain technology. The benefits of distributed ledger technology-based national digital currency include convenience of use, greater inclusion, reduced banking and transaction fees and real time settlements.
The African continent is a hotbed of cryptocurrency innovation. Many crypto-platforms are actively operating in the region, bringing financial inclusion to the masses. However, the South African Reserve Bank believes that the challenge lies in balancing the advantages offered by blockchain technology with the potential risks it poses.
If South Africa indeed goes ahead with its planned digital currency, it will join the ranks of Tunisia and the West African Economic and Monetary Union. Tunisia already has eDinar in place, currently undergoing the process of migration on to blockchain. The Western African Economic and Monetary Union nations are expected to have a digital version of West African franc sometime next year, created by the Central Bank of Senegal.
Also, Bitcoin use in other African nations is at an all-time high. The weekly Bitcoin exchange volumes in Nigeria over the past 45 days is reported to be close to $1.3 million.
The conducive atmosphere created by the governments and financial institutions in the continent may soon turn African nations into leading adopters of cryptocurrency and blockchain technology.
Ref: MoneyWeb | Image: Shutterstock