The South African Reserve Bank (SARB) has given indications that it might soon consider bitcoin as legal tender in the country. Recently, the SARB has initiated moves to begin testing regulations related to bitcoin and other cryptocurrencies.
If this move is initiated, South Africa will be the second nation on the African continent to make significant cryptocurrency incursions after Tunisia announced that it intends to digitise its sovereign currency and move it onto the blockchain.
Loerien Gomaroff, CEO of Bankymoon, a blockchain-based solutions provider, indicated that his company has been selected as the first sandbox (experimental) enterprise to trial run the new regulations by SARB.
Gomaroff says that they have been in detailed talks with the central bank for some time now and he is very optimistic about the implementation and outcomes. He says that the government is seriously considering classifying cryptocurrencies as alternative currency with seminars and workshops being organised for the purposes of education, sensitisation, and awareness creation.
While speaking to BusinessTech at a Norton Rose Fulbright blockchain event, Gomaroff expressed satisfaction at the steps taken by the South African government to formalise cryptocurrency. He believes that formalisation of cryptocurrencies will help make them mainstream and catalyse adoption by the wider populace. He further explains that bitcoin will be the only cryptocurrency used in this experimental regulatory phase and a successful implementation will help ensure the roping-in of other altcoins.
The SARB is Open to Digital Currencies
The South African Central Bank revealed its inclinations towards bitcoin as early as February when it indicated that it will carry out its own research about blockchain technology’s feasibility in South Africa. According to reports by MoneyWeb, reliable sources say that the SARB is even willing to go further to explore the possibility of floating a national digital currency based on blockchain technology.
This action by the SARB further places South Africa in firm position as one of the continent’s most innovative and technology focused countries. I, fact very few nations globally have taken steps to tap into the advantages cryptocurrencies present; as such South Africa joins the league of elite countries in this respect.
Some sections of South Africa’s financial market influencers like Michael Jordaan believe that cryptocurrencies will be as popular as regular currencies by the year 2025. Mr. Jordaan, a former CEO of First National Bank (FNB) who now heads private investment company Montegray Capital said that digital currencies are likely to make central banks obsolete. He makes note of this because of the very unconventional nature that digital currencies have which makes them a credible threat to the existing banking system due to the numerous benefits it presents to the end user; this includes practically free currency transfer and elimination of bottlenecks.
Cryptocurrencies are beginning to gain mainstream attention so much so that the International Monetary Fund (IMF) recently published a discussion document advising banks worldwide to start considering some investments into cryptocurrencies and other fintech opportunities as a survival strategy in the event that cryptocurrency became popular with consumers.