Regulators and Policymakers Must Be Involved in Shaping Potential Move to DLT Markets – Regulation Bitcoin News

South African’s head central bank insists on the involvement of policymakers as well as regulators in any possible move to market that is based upon distributed ledger tech (DLT).

Thinking about the implications of innovation

The governor of the South African Reserve Bank (SARB), Lesetja Kganyago, has argued that central banks, regulators, and policymakers should and must play a role in “shaping a potential move to DLT-based markets.”

According to Kganyago, these stakeholders can achieve this objective by “pondering the implications of innovation, promoting responsible innovation for the public good.” In addition, they can also do this by “informing an appropriate policy and regulatory response.”

Kganyago, in a virtual address after the release of Project Khokha 2 (PK2) report, shared his opinions about the future central banks in a world based on decentralization. Kganyago said,

Decentralised markets are unlikely to be appropriate in every instance. I also doubt that decentralization will ensure the achievement of public policies such as consumer protection and financial stability. These objectives fall under the purview of regulators and central banks.

The governor nonetheless concludes in his address that the role of central banks and regulators should “evolve with financial markets” to ensure they stay relevant in future markets just as they are relevant now.

Try to find no indications of support

Meanwhile, Kganyago revealed that during the second phase of the project, PK2 had explored the implications of “tokenisation in financial markets through a proof-of-concept (POC) that issued, cleared and settled SARB debentures using distributed ledger technology (DLT).” PK2 also examined “how settlement in central bank money and commercial bank money can happen on DLT.”

The SARB governor clarified in remarks that the PK2 experiment did “not signal support for any particular technology” or a change in policy direction.

According to Kganyago, in the initial experiment, dubbed PK1, the central bank and its partners had explored “the use of DLT for interbank settlements by successfully replicating some functions of the South African real-time gross settlement (RTGS) system on DLT.”

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Terence Zimwara

Terence Zimwara was a Zimbabwe-award winning journalist, author, and writer. He is a prolific writer on the economic woes of African countries, as well as digital currencies that can be used to provide an escape path for Africans.