South Africa's Central Bank: It's 'Too Risky' to Launch a Cryptocurrency

A senior official for the South African Reserve Bank has spoken of the risks for the institution in launching its own cryptocurrency.

Aug 23, 2017 at 9:00 a.m. UTC
Updated Sep 13, 2021 at 6:51 a.m. UTC

A senior official for South Africa's central bank has said it's "too risky" for the institution to launch its own cryptocurrency.

Speaking during the Strate GIBS FinTech Innovation Conference 2017 on Monday, the deputy governor of the South African Reserve Bank, Francois Groepe, commented on developments in the fintech space, taking a particular focus on blockchain and distributed ledgers.

According to regional news source ITWeb, Groepe suggested that the central bank has an open mind on the question of issuing its own digital currency. That said, he struck a cautious note about the short-term prospects of doing so.

"Virtual currencies have the potential of becoming widely adopted," he told attendees, going on to say:

"However, for the central bank to issue virtual currencies or cryptocurrencies in an open system will be too risky for us. This is something we really need to think about."

Groepe's comments come almost a year to the day after the South African Reserve Bank indicated that it would adopt an open perspective on the tech – even leaving the door open to applications of its own.

"We are willing to consider the merits and risks of blockchain technology and other distributed ledgers," the bank's governor, Lesetja Kganyago, said at the time.

Other major financial players in the country, including its central securities depository, have also moved to investigate possible uses of blockchain.

South African rands image via Shutterstock

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