At the World Economic Forum (WEF) 2023, which was hosted in Davos, Switzerland, South African Reserve Bank (SARB) governor Lesetja Kganyago addressed some of the difficulties that surround the adoption of central bank digital currencies (CBDCs).
Kganyago shared his thoughts on CBDCs at a panel discussion at the World Economic Forum 2023 titled "In the Face of Fragility: Central Bank Digital Currencies." He questioned whether or not there is a genuine issue that can be handled by this new technology.
Kganyago questioned whether or not this was a case of a solution seeking for a problem, or whether or not there was a genuine issue that needed to be addressed.
The governor of the central bank also brought up the fact that the nations who are looking into CBDCs and doing research on them have cited a number of different reasons for wanting to establish them.
This involves bringing the central bank up to date, improving the efficiency of national payment systems, addressing the failure of domestic markets, and ensuring that everyone has access to sufficient financial resources.
On the other hand, the official from the government brought up the issue of demand.
Before CBDCs can be implemented, there has to be a discussion on a national level, as Kganyago pointed out.
He stated that before making this available to the general public, central banks should first determine whether or not the general public is interested in using it.
In light of these arguments, Kganyago said that the South African Reserve Bank (SARB) is approaching the issue of CBDCs with extreme caution. According to what he had to say, " We are going to be excellent pupils when it comes to retail CBDCs," and " I would rather be a follower than a first mover."
Back in 2021, the governor of the SARB expressed his disagreement with the notion that cryptocurrencies should be classified as currencies.
The official from the government said that cryptocurrency only satisfies two of the three standards for currencies, and argued that it does not have widespread usage.