A retail CBDC is a digital form of cash that combines the best aspects of cash and digital payments, the release said.
With this study, the SARB will examine how a CBDC would affect its political position and mandate, the statement said. The study will examine how a CBDC can be implemented practically on various technology platforms. It will take into account several factors, including political, regulatory, security and risk management implications.
This CBDC feasibility study is different from the Khokha project, which examines the settlement of high-value transactions between commercial banks and other stakeholders, the statement said. The two studies should allow better alignment and coordination of policies.
The cryptocurrency market, known for its volatility, has caught the attention of both investors and the biggest banks in several countries. Central bankers in the United States, China, India, and Europe, among others, began to look into the shape of money.
This has at times led to severe action against the generally free cryptocurrency market. In India, gateways like Paytm and others have banned transactions on cryptocurrency exchanges, in order to make room for the CBDC being developed by the central bank.
This comes despite the country’s Supreme Court ruling that allows banks to interact with crypto services and players.
But the country could consider a rule that outright bans crypto services. The push by India’s central bank is in line with that of others around the world, as China’s central bank has said cryptos are not real.