South African reserve bank joins peers to test central bank digital currencies

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FILE PHOTO: The buildings with the logos of three of South Africa's biggest banks, ABSA, Standard Bank and First National Bank (FNB) are seen against the city skyline in Cape Town, South Africa, September 3, 2017.REUTERS/Mike Hutchings/File Photo
FILE PHOTO: The buildings with the logos of three of South Africa's biggest banks, ABSA, Standard Bank and First National Bank (FNB) are seen against the city skyline in Cape Town, South Africa, September 3, 2017.REUTERS/Mike Hutchings/File Photo

The South African Reserve Bank (SARB) has joined Bank for International Settlements Innovation Hub, Reserve Bank of Australia, Bank Negara Malaysia, and Monetary Authority of Singapore to test the use of central bank digital currencies (CBDCs) for international settlements, said the SARB on Thursday.

The CBDCs system aims to allow direct transactions between institutions, reducing costs and increasing speed.

The SARB said the project will develop prototypes for shared platforms that will enable international settlements with digital currencies issued by multiple central banks.

“After years of mostly domestic research and exploration, we are very pleased to see that these common insights about the need to explore cross-border CBDC payments and interoperability are coming together internationally. We are particularly excited to be part of Project Dunbar given the SARB’s role in operating the regional wholesale settlement system in the Southern African Development Community,” said SARB Dputy Governor Rashad Cassim.

He said the outcomes of the projects will inform development of global and regional platforms and support the G20 roadmap for improving cross-border payments. Enditem

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