In South Africa and Indonesia, the Landesbanken are starting CBDC projects and underlining their ambitions to introduce digital central bank money.
There are more and more countries where plans for a central bank digital currency (CBDC) are taking shape. The most recent example is South Africa. The Central Bank of South Africa (SARB) has started preliminary studies, according to a press release issued on Tuesday. The aim is to find out how useful a digital currency would be for retail.
In its announcement, the SARB defines a retail CBDC as a sovereign digital currency issued by the central bank and suitable for electronic payments:
The feasibility study will include hands-on experimentation with various emerging technology platforms. A variety of factors are considered, including the policy, regulatory, security and risk management implications.
South Africa’s CBDC study is expected to last through 2022. Another pilot project called “Project Khokha”, which is intended for institutional digital payments, is running in parallel. This project uses the Ethereum-based quorum infrastructure to test digital clearing and settlement for interbank payments. Like other central banks currently investigating CBDCs, the SARB stated that their current exploratory studies are in no way indicative of any plans to issue a digital edge.
There are also CBDC plans in Indonesia
Bank Indonesia (BI), the central bank of Indonesia, is also planning to issue a CBDC to expedite payments. The central bank is currently examining which technology to use for the digital rupiah. This is what Governor Perry Warjiyo said at a streamed press conference Tuesday, according to a Reuters report. Once the digital rupiah is issued, it will be legal tender in Indonesia alongside banknotes. But the central bank doesn’t seem to have a schedule yet as to when it will issue them. The governor also said the rupiah is the only legally accepted currency for payments and that BI will regulate the digital rupiah in the same way that it regulates banknotes and card-based transactions.
Cryptocurrencies are banned as a means of payment in Indonesia. However, it is legal to trade with them. Earlier this month, the Indonesian government announced that it plans to tax profits from crypto trading. Indonesia joins a list of Asian countries that are researching a CBDC. Hong Kong, Thailand and South Korea are all currently working on rolling out similar pilot programs. China, whose plans are by far the most advanced, is even about to introduce the digital yuan.