Standard Bank CEO Sim Tshabalala cautiously supported the use of central bank digital currencies (CBDCs), while expressing concerns about cryptocurrencies generated by private entities. At the African Central Bank Conference held in Johannesburg, Tshabalala questioned the legitimacy of cryptocurrencies generated by private entities and warned against their potential use for money laundering. He also noted the risks that cryptocurrency deposits or transactions could pose for banks.
Standard Bank Group, Africa’s largest bank with total assets of almost $171 billion, has been reluctant to accept cryptocurrencies. However, the Reserve Bank of South Africa (SARB) last year participated in Project Dunbar, a CBDC initiative that proved that financial institutions could use CBDCs to transact directly with each other on a platform. shared form. The SARB is also conducting a feasibility study on CBDCs.
Tshabalala recognized the potential benefits of CBDCs, particularly in interbank clearing and increasing participation in the formal financial system while reducing tax evasion and financial crime. However, he also raised questions about the regulatory framework for public retail banks and central banks that act as retail banks, saying that if they are not subject to the same regulations as private sector competitors, the risks and the moral dangers they introduce into the financial system are not mitigated by calling them CBDCs.
The conference, which was attended by central bank governors and policy makers from 14 African countries, is themed “Strengthening Africa’s Partnerships”. Tshabalala expressed Standard Bank’s support for the African Free Trade Area and his optimism in facilitating the movement of goods, people, ideas and capital between African countries.