{"id":2309,"date":"2017-08-23T17:49:05","date_gmt":"2017-08-23T17:49:05","guid":{"rendered":"https:\/\/www.bitcoinsportsbooks.com\/?p=2309"},"modified":"2023-03-07T12:59:58","modified_gmt":"2023-03-07T12:59:58","slug":"south-africas-central-bank-says-its-too-risky-to-issue-digital-currency","status":"publish","type":"post","link":"https:\/\/www.bitcoinsportsbooks.com\/blog\/2017\/08\/23\/south-africas-central-bank-says-its-too-risky-to-issue-digital-currency\/","title":{"rendered":"South Africa’s Central Bank Says It’s ‘Too Risky’ to Issue Digital Currency"},"content":{"rendered":"
The deputy governor of the South African Reserve Bank (SARB) has said that it would be ‘too risky<\/a>‘ to start issuing its own digital currency.<\/p>\n Speaking at the\u00a0Strate GIBS FinTech Innovation Conference 2017, Francois Groepe, the deputy governor of the South African Reserve Bank, commented on the development of a digital currency such as bitcoin. However, while bitcoin is gaining dominance, he stressed that the central bank needs to ensure that payment methods aren’t abused to fund money laundering or terrorism.<\/p>\n He noted, though, that digital currencies are becoming more recognised as people understand their concept.<\/p>\n As a result, he said that:<\/p>\n “Virtual currencies have the potential of becoming widely adopted. However, for the central bank to issue virtual currencies or cryptocurrencies in an open system will be too risky for us. This is something that we really need to think about.”<\/p><\/blockquote>\n According to\u00a0Groepe, though, the central bank has created a three-member team to look into how cryptocurrencies work. The bank is also expected to launch a digital currency sandbox to test how they function.<\/p>\n He also discussed the financial industry and how innovation is changing the sector, mainly through digital currencies.<\/p>\n He added:<\/p>\n “We are witnessing the disruption of financial services. Over the past decade or so, fintech’s attention and publicity has continued to intensify and increase. It is continuing to usher in completely new ways of banking. Developments in the fintech space are part of an evolutionary process driven by innovations.”<\/p><\/blockquote>\n As of the 23th August bitcoin is trading at $4,239. This is a 6.93 percent increase in 24 hours, but a 0.08 drop in seven days. At press time, the digital currency’s market cap is worth over $70 billion.<\/p>\n <\/a><\/p>\n Just yesterday, bitcoin’s price was listed at $3,674\u00a0as it underwent an early-week correction period. As a consequence, its market cap value dropped to $60.7 billion. However, this price rally has helped to push it back over the $4,000 mark. The recent drop in price is believed to be down to a hashrate shift from bitcoin to bitcoin cash.<\/p>\n <\/a><\/p>\n According to a recent report, bitcoin cash surged to a new all-time high on the 19th August when it reached $914. Furthermore, the alternative to bitcoin was reported to have mined its first eight megabyte block, clearing nearly 40,000 transactions. According to data from Coin Dance, bitcoin cash had become 69 percent more profitable to mine than bitcoin.<\/p>\n Not only that, but concerns have been circulating the SegWit and SegWit2x debate, which may have pushed bitcoin’s price down.<\/p>\n Despite this, however, the number one currency is still the leader in the field. Ethereum, in second place, has a market cap worth $30.2 billion. Whereas, bitcoin cash, in third place, is valued at $10.9 billion. Nevertheless, fourth placed ripple is close behind with a market value amounting to $10.8 billion.<\/p>\n Considering the dominance that bitcoin is showing in the market, it’s may be surprising that South Africa’s central bank thinks it’s too risky to start issuing their own version.<\/p>\n Last August, it was reported that The Bank of England had issued its own digital currency. Known as the RSCoin, it shares similar traits to bitcoin such as being managed by the blockchain. However, one of its key differences is that it is centralised within The Bank of England. As a result, only one bank generates each unit of the digital currency.<\/p>\n The bank has keenly embraced the blockchain, which is evident in an excerpt from a quarterly bulletin<\/a>. It says:<\/p>\n “… the key innovation\u00a0of digital currencies is the \u2018distributed ledger\u2019 which allows a payment system to operate in an entirely decentralized way, without intermediaries such as banks.”<\/p><\/blockquote>\n Not only that, but according to the U.K.’s central bank, they don’t see that digital currencies ‘pose a material risk\u00a0to monetary or financial stability in the United Kingdom.’ However, it will continue to monitor developments<\/a> in this area.<\/p>\n No doubt aware of how finance is changing, The Bank of England appear keen to maintain a hold on the sector even if that means issuing their own digital currency.<\/p>\n Yet, while South Africa’s bank may not be issuing its own cryptocurrency anytime soon, the bank has been discussing regulations for bitcoin.<\/p>\nBitcoin Dominates the Market<\/h2>\n
Are Fears Justified?<\/h2>\n
SARB Begins Testing Digital Currency Regulations<\/h2>\n