Statement by The South African Reserve Bank
The South African Reserve Bank (SARB) has a responsibility to promote a sound and effectively regulated financial system. The SARB therefore takes a balanced approach to technological innovations, considering the potential benefits and risks of each innovation. It is against this background that the SARB recently established the Financial Technology (FinTech) Programme to strategically assess the emergence of FinTech in a structured and organised manner, and to consider its regulatory implications.
The main goal of the programme is to track and analyse FinTech developments and to assist policymakers in formulating frameworks in response to these emerging innovations.
The FinTech Programme will focus on three primary objectives:
ConsenSys (a world-leading expert on Quorum) is the technology partner that will assist the SARB in the design, setup of infrastructure and running of the POC. This does not imply a radical move to DLT for the country’s national payments infrastructure, but rather a structured approach to understand the implication of using a tokenised asset on DLT technology to transfer value. A public report will be released to explain all the findings, risks and benefits of the associated project during the second quarter of 2018.
These initiatives aim to assist in the formulation of appropriate policy frameworks for the possible regulation of FinTech.
The SARB describes FinTech as technologies applied to financial services with the potential to disrupt current business models, applications, processes or products. In order to evaluate the regulatory implications of these innovations, a framework is used to assess the impact of these developments in terms of the underlying economic function or activity performed (e.g. deposit taking, payments, lending and investments) as opposed to the specific entity or technology being used.