Cyril Ramaphosa, the President of South Africa has proposed the creation of a new African monetary system that could be a cryptocurrency.
Ramaphosa addressed reporters at the African Union summit in Kigali, referring to a unique African currency. In establishing an African Continental Free Trade Area (CFCTFA), he said a digital currency could meet the broader needs of African states.
A total of 44 countries had to sign the CFCTFA agreement. Although South Africa was not yet a signatory to this agreement, the statesman said: "Businessmen have said that this does not require a single currency, and in my opinion, it is is certainly the case. "
"We will begin to interact with the idea and the notion of a single currency. It is possible for a digital currency to precede a true single currency because it is easier than having a real currency, " the South African president told the media.
The Reserve Bank takes the lead
The Reserve Bank of South Africa recently launched a Fintech program to evaluate its position on cryptocurrencies. It studies the potential regulatory requirements of cryptocurrencies, considering its use in the country.The main objective of the program is "to examine digital currencies in order to establish an appropriate policy framework and regulatory regime," which would facilitate the implementation of a cryptocurrency-based currency system.
Most importantly, the Reserve Bank would be experimenting with the use of the Blockchain with distributed ledger technologies. The project was named Khoka. He is specifically studying Quorum ™, the authorized version of the Ethereum network founded by JP Morgan. The regulatory sandbox has already been tested in July 2017, in collaboration with Bankymoon, a Blockchain solution provider.
Conflicting perspectives
While the Reserve Bank has adopted an open vision for new technologies such as cryptocurrencies and Blockchain,
many other institutions in neighboring countries are absolutely dubious on the subject.
In September, the central bank of Namibia announced that cryptocurrencies should not be accepted as a method of payment, neither goods nor services.
Swaziland's central bank has been more open to engaging in research on cryptocurrencies before making any pronouncements. The head of the bank, Majozi Sithole, also said that the institution would avoid "stifling innovation," and did not reject cryptocurrencies.
As for Zimbabwe, citizens were able to escape inflation by buying Bitcoin. The price of Bitcoin reached $ 13,000 on the local Golix while its average price on international trade was $ 8,000 in November 2017.
However, Norman Mataruka, the director and registrar of the Reserve Bank, later commented that Bitcoin is not legal.
Other countries, such as South Korea, are opening their arms to welcome the Blockchain. The South Korean government intends to boost the use of Blockchain technology within the country to better protect user information in the new payment system that could include cryptocurrencies. The Financial Services Commission of South Korea (FSC) is encouraging businesses to use Blockchain technology.
Patience is a virtue
It would be necessary to wait for the reaction of the African leaders to the comments of Ramaphosa. The concept of a new currency has already been mentioned before, but the President's remarks have underlined a wider interest.
Ramaphosa concluded by explaining:
It may take time, it may take years, but it is interesting that something we have never talked about in the past is being challenged today. People have always had a sense of sovereignty around their own currency, the feeling that their currency is their sovereignty, their nation, but now they think beyond the borders of their own nation.What do you think of President Ramaphosa's comments on the possibility of a national digital currency in South Africa? React in the comments section to let us know your opinion.