The Reserve Bank of South Africa representative says that blockchain technology adoption for cryptocurrency payment system is an interesting idea but will take some time, maybe years or even decades. The statement gave a clear indication to the population of South Africa that they will have to wait before they can have a functioning cryptocurrency as a medium of exchange to replace fiat currency.
Francois Groepe, the Reserve Bank’s leader for Project Khokha mentioned that prospect of central bank issued digital currency exist, but the idea is not imminent & could be many decades away.
The South African Reserve Bank already released the report on project Khokha that assesses the new innovation in the sector of finance. The experimental report displayed that by using blockchain technology the daily volume of South African payment system can be handled in less than 2 hours while maintaining complete confidentiality. The entire project was undertaken to research the emergence of Bitcoin and other cryptocurrencies using blockchain as the underlying technology. Just like other Central banks experimenting with blockchain technology, routine wholesale payments have been the most common venture to research for South Africa as well.
The project Khokha while researching the possibility of adopting distributed ledger based systems also tried to impart blockchain related skills to a certain part of the population to ensure collaborative possibilities around blockchain remain open for South African and external investors.
Although various countries contemplating with the idea of a central bank issued cryptocurrency agree about the benefits like transparency and efficiency but there are still immense concerns regarding monetary policy transformation, national financial stability & cybersecurity. Even countries like Sweden where the use of cash is reducing everyday and the government has displayed interest in issuing e-krona are not able to immediately introduce cryptocurrency as a replacement of the nations fiat currency due to major legal and regulatory factors that can have a serious economic impact.
The blockchain technology in the meantime is progressing at this speed of light. There are new innovations, research and development taking place every day that provide new methods of implementation and integration of the technology in the existing institutional system of operations. But looking at the present options available with the blockchain technology the South African central bank concluded that we might be some years or decades away from replacing fiat currencies by cryptocurrencies.