REGULATION | South Africa Reserve Bank Sets a 2-Year Timeline to Accelerate Testing of Stablecoin Use Cases

"In the interim, the SARB is open to allowing eligible stablecoins used for domestic payments to be tested in the regulatory sandbox," the apex bank said.

The South Africa Reserve Bank (SARB) has set a 2-year  timeline within which to accelerate the selection and testing of stablecoins use cases in its regulatory sandbox.

This is indicated in SARB’s Digital Payments Roadmap Report, a report the banks says has been designed to realize the overarching goals and strategies of the National Payment System Framework and Strategy: Vision 2025.


“In the interim, the SARB is open to allowing eligible stablecoins used for domestic payments to be tested in the regulatory sandbox,” the apex bank said.

“The sandbox approach would provide the SARB with an opportunity to understand and assess payment use cases in the short term as well as their potential for enhancing the adoption and use of digital payments, which process may assist in developing a regulatory, supervisory and oversight framework for crypto-based payments.”

While South Africa’s Financial Sector Conduct Authority (FSCA) has begun issuing licenses to crypto services, SARB noted that it is collaborating with the FSCA to ensure that the regulation of crypto-assets is appropriate, taking into account the potential risks and unintended consequences.

When it comes to a retail CBDC, SARB’s roadmap has given a 2-year timeline for further investigations.


“The SARB should further explore the feasibility of digitising money/cash through the issuance of retail CBDCs and use cases for a wholesale CBDC.”


However, the bank says it is exploring the feasibility of leveraging DLT (digital ledger technology) to enhance the country’s settlement system/infrastructure.

It is currently embarking on Project Khokha 2x, which will focus on wholesale CBDCs and stablecoins. According to the bank, the wholesale CBDCs could be used for settlements and collateral. The stablecoin use case will focus on commercial bank-issued stablecoins for transferring value within the African region.

Khokha 2x is part of a series that started in 2018 when the bank conducted Project Khokha 1, which was a proof-of-concept project designed to simulate a ‘real world’ trial of a distributed ledger technology (DLT)-based wholesale payment system.

Project Khokha 2 (not to be confused with Khokha 2x) was undertaken in 2022, with the objective of unpacking the use of DLT and tokenisation in the financial markets through the issuance of a SARB debenture on DLT.

From a policy and regulatory perspective, the SARB is developing its approach to crypto-assets and leveraging best practices from the Group of Twenty (G20), Financial Stability Board and Committee on Payments and Market Infrastructures (CPMI) on appropriate regulatory approaches to crypto-assets regulation.




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