Úno 04

South Africa Latest to Consider Creating National Digital Currency

· February 4, 2017 · 8:00 am

One more nation, South Africa, is making the first step of migration to a fully digital economy, speaking about offering their own national digital currency based on blockchain technology.


South Africa Looks to Digital Currency

There are many advantages to nation-states, both stated and unspoken, to head in the direction of a national digital currency. The chief executive of the South African Reserve Bank (SARB) said that this would include more inclusion and economic reach, faster settlements and lower costs.

“If we go the route of issuing a digital currency, the objective would be to take advantage of emerging technologies so that we reap the benefits,” said Tim Masela, head of the National Payments System at the SARB in a statement.

We foresee that these benefits could be realized, which would be good for the transacting public. But of course, the risks have to be borne in mind as well and that’s what we want to balance.

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In Africa alone, digital currency use and national propagation seem to be a step ahead of the rest of the world’s governments. At the end of 2015, Tunisia announced that they had already successfully created a blockchain and a digital eDinar.

Senegal announced last year that they have struck a deal with a regional bank for their own national digital currency and this is expected to expand into neighbor nations as well. Nigeria has taken to Bitcoin’s digital currency in a big way over the last year.

“The proponents of the technology say ‘you don’t need to regulate it; it will self-regulate’. We don’t have an idea of how that will happen, we still need to reflect on this and need a good case [to show] that it can self-regulate. Otherwise, we believe that if it is not regulated and things go wrong, it could have a spillover effect on the financial systems,” he said.

Sweden is well along in removing cash from their society and going cashless is expected by the end of the decade. The Ukraine has declared their digital intentions recently. Australia, Canada, and even the United States have had discussions about their own versions of Bitcoin as well over the last couple of years. China is fast-tracking their own national Bitcoin system to prevent “capital flight,” when citizens move their money overseas due to a loss of value, domestically.

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One thing that we want to state very categorically is that, in working closely with the industry, we are very conscious about possible regulatory capture. We wouldn’t want to be seen as being captured, where the regulation would be dictated by participants in the market. We will guard our independence so that the regulation is for the good of the system and not necessarily informed by the incumbents’ positions.

Plenty of Downsides for Consumers

This eventuality of a world of national digital currencies is exciting but is ceded with potential unstated consumer downsides. Mass surveillance by banks and governments becomes a plug-and-play scenario. Economic capture is also assured, as one cannot divest themselves from the currency, as there is no way to actually withdraw funds from the system.

Cash is the last private form of payment, and that is being phased out in many nations, creating a future economic system where all transactions are monitored and all user’s finances are kept on a server, which can also be hacked.

According to the IMF, South Africa is the world’s 41st-largest economy, similar to Singapore and Columbia.

Will South Africa’s own national currency be a success? Share your thoughts below!


Images courtesy of Wikimedia, StudentBrands.co, Shutterstock

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Úno 29

LocalBitcoins Volume In South Africa Shows 50-fold Growth In One Year

Source: bitcoin

Bitcoinist_South Africa

The concept of Bitcoin has been attracting attention from all over the world in recent years. Digital currency provides a way to achieve financial freedom regardless of one’s location or access to existing services and platforms. South Africa seems to be taking a serious liking to Bitcoin in recent weeks, as the LocalBitcoins trading volume keeps spiking week over week.

Also read: London Bitcoin Forum – The Conference for Bitcoin & Blockchain Innovations – Kicks Off March 23rd

South Africa Goes Through Financial Turmoil

Historically speaking, the increase in trading volume on LocalBitcoins in South Africa has been taking place since April of 2015. Even though a small increase is nothing to make note of these days, the volume has been steadily increasing ever since that time. Or to be more precise, the LocalBitcoins volume has grown by almost 5,000 percent in the past eleven months.

Financial trouble has been brewing in South Africa for quite some time now, as the country has gone through no less than three different finance ministers in less than a week in December of 2015. Even though Pravin Gordhan had served as a finance minister from 2009 to 2014, his appointment at the end of 2015 was a drastic move to put investors’ minds at ease.

The previous finance ministers between the end of 2014 and December 2015 have been able to reign in state spending, which was a cause for great joy among South African citizens. However, the South African Rand fell to record lows during this same period, part of which could be blamed on the increasing USD value.

A weak Rand is creating financial instability in the country, forcing residents and investors to look for other options. Bitcoin seems to prevent the answer to the problem, as this popular digital currency is available to anyone in the world, without oversight from banks or governments.

However, obtaining Bitcoin can be a bit of a problem for novice users. Luckily, there are platforms like LocalBitcoins, which connects buyers and sellers of digital currency with each other. Unlike traditional Bitcoin exchanges, LocalBitcoins will not touch customer funds at any step along the way, as they just act as a platform to connect interested parties and create a reputation system for individual users.

LocalBitcoins Usage On The Rise

It should come as no surprise to find out the Bitcoin volume against the South African Rand is seeing a healthy boost on LocalBitcoins. The transaction volume has been increasing month over month since April of 2015, and business has seriously picked up as of November of last year. This surge in Bitcoin volume appeared around the same time the country when through three ministers of finance, so there might be a correlation there.

At the time of publication, LocalBitcoins reached a weekly volume of 12 million South African Rand in the past week. This is quite an increase compared to the last week of February in 2015, as the volume then was sitting at 251,254 Rand. To put this into numbers people can relate to, the LocalBitcoins volume in ZAR increased from US$16,624.66 per week to US$746,240.43 in less than one year.

What are your thoughts on this major LocalBitcoins trading volume in South Africa? Will this trend continue? Let us know in the comments below!

Source: Coin Dance

Images courtesy of LocalBitcoins, Shutterstock

The post LocalBitcoins Volume In South Africa Shows 50-fold Growth In One Year appeared first on Bitcoinist.net.

LocalBitcoins Volume In South Africa Shows 50-fold Growth In One Year

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