The South African Reserve Bank (SARB) has established a financial technology (fintech) programme to strategically assess the emergence of fintech in a structured and organised manner and to consider its regulatory implications.
The central bank explains that the programme is aimed at tracking and analysing Fintech developments and assisting policymakers in formulating frameworks in response to these emerging innovations.
The programme will have three focus areas, including reviewing the SARB’s position on private cryptocurrencies to inform an appropriate policy framework and regulatory regime.
This review will address regulatory issues such as clearing and settlement risks, exchange control impacts, monetary policy and financial stability, as well as other matters such as cybersecurity considerations.
“Through collaboration with the other regulatory bodies, matters such as tax implications, consumer and investor protection, and money laundering activities will also be addressed,” the SARB says.
It expects to complete the review in the second half of this year.
Its second aim is to investigate and decide on the applicability of innovation facilitators for the SARB, which is a collective term for innovation hubs, regulatory sandboxes and accelerators.
The SARB hopes to have concluded its assessment of the appropriateness of innovation facilitators by the third quarter.
“Clear and transparent eligibility and participation criteria will be developed to assist in the consideration of applicants into a regulatory sandbox,” it notes.
As part of its third focus area, the SARB will start Project Khokha, which will experiment with distributed ledger technologies (DLTs) to gain a practical understanding of DLTs through the development of a proof of concept in collaboration with the banking industry.