The South African Reserve Bank (SARB) says there is no immediate need to introduce a retail central bank digital currency (CBDC), despite confirming its technical feasibility in a position paper released Thursday.
The study found that while a retail CBDC – a digital form of cash designed for everyday transactions – could be implemented in line with regulatory and policy objectives, current priorities lie elsewhere.
“The analysis does not reveal a strong immediate need for such an instrument,” the paper said.
“Instead, the SARB concluded that ongoing initiatives such as the Payment Ecosystem Modernisation Programme and expanding non-bank participation in the national payment system should remain the priority in the short-to-medium-term.”
The paper comes amid growing global interest in digital currencies, with several central banks exploring CBDCs as complements to cash and tools for financial innovation.
In South Africa, the debate has been driven by the country’s evolving payments landscape and persistent financial inclusion challenges.
SARB noted that digital payments are expanding rapidly, boosted by innovations from commercial banks, fintechs and public sector initiatives.
However, physical cash continues to play a significant role, particularly among communities facing infrastructure, cost and power supply barriers.
“The continued ability to redeem private money into safe and liquid public money (i.e. banknotes and coin) provides a safety net in times of economic stress and maintains confidence in the financial system,” the bank said.
While ruling out immediate implementation, SARB stressed that a retail CBDC could be necessary in the longer term to safeguard public access to central bank money and enhance the payments ecosystem.
The bank also announced that its next phase of research would focus on wholesale CBDC applications, reflecting global momentum around innovations in financial markets and cross-border payments.
JN/APA