The South African Central Bank slows down its retail CBDC plans and prioritizes the reform of the payment system.

The South African Reserve Bank (SARB) clearly stated in its latest research report that although retail Central Bank Digital Currency (CBDC) is technically feasible, South Africa does not urgently need to launch a digital rand at this time, and should focus on upgrading and reforming the existing payment system.

The report points out that improving payment infrastructure, enhancing settlement speed, and expanding the participation of non-bank institutions are more realistic and can quickly improve financial accessibility. In contrast, launching a publicly accessible CBDC would require an entirely new legal and technical framework, with higher implementation costs and longer timelines. Therefore, the SARB will focus on the wholesale scenarios of digital money and enhancing the efficiency of cross-border payments, rather than promoting a consumer-oriented CBDC.

Despite the fact that about 16% of adults in South Africa do not have bank accounts, research shows that for retail CBDC to have an inclusive effect, it must meet or exceed cash in areas such as offline use, low fees, privacy, and widespread acceptance. Currently, digital money is still not sufficient to fully bridge the payment network gap.

At the time of this report's release, the South African Central Bank has also intensified its risk warnings regarding crypto assets and stablecoins, pointing out that these digital assets may be used to circumvent foreign exchange controls and pose a threat to technology-driven financial systems.

Globally, the progress of retail CBDCs remains uneven. According to data from the Atlantic Council, only Nigeria, Jamaica, and the Bahamas have fully launched digital money, while other countries are still in the pilot or research stage.

Unlike South Africa's cautious approach, the United States, under the leadership of the Trump administration, is pushing to suspend the CBDC plan while advancing a series of key crypto bills. The GENIUS Stablecoin Act, the CLARITY Act, and the Anti-CBDC Surveillance State Act have all been advanced in the House of Representatives, although the CLARITY Act is still awaiting Senate review and requires final approval from the President to take effect.

Overall, South Africa's choice to prioritize the development of payment infrastructure rather than quickly launching a retail-type CBDC reflects its cautious consideration of financial stability and the maturity of the regulatory framework. (Cryptonews)