Despite the regulators’ fascination with the new technologies, local banks seem to remain fairly cautious about their adoption.
like blockchain, digital currencies and unified ledger technologies are consuming the attention of central banks around the world with new central bank digital currencies pilots popping up almost monthly.
The South African Reserve Bank has been no slouch when it comes to exploring opportunities relating to CBDCs The reason for the relatively low number of new digital currency and blockchain projects could be due to a number of reasons.Most banks are heavily invested in their existing core banking systems and processes. Transitioning to new crypto-based payment rails and technologies is perceived as requiring significant effort and investment, which banks may be reluctant to undertake, especially if their current systems are functioning – albeit sub-optimally in some cases.
Banks may be missing out on opportunities to improve the speed, cost and accessibility of cross-border payments Companies like Wise and Ripple have been using crypto rails to facilitate cross-border transfers and remittances to great effect. By not adopting these technologies, banks may be missing out on opportunities to improve the speed, cost and accessibility of cross-border payments.Another of the challenges faced by banks is around assessing creditworthiness for customers with limited credit history. This is especially the case when it comes to vulnerable groups such as immigrants.
Digital Currencies Sergio Barbosa
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