Crypto in Africa: SA backed digital currency, users get a new app

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South Africa has joined the list of few countries looking to create a state-backed digital currency. Being a leader on crypto matters, many are looking to see what direction the country will take. Getting crypto backed currency will become a game-changer for South Africa and the African crypto market as a whole. While many are waiting on this project, a few others like Kudi’s app are ready to be used by crypto users in the continent.

South Africa wants its cryptocurrency

South Africa is looking at creating its very own cryptocurrency, backed on the rand, with talks underway by the South African Reserve Bank (SARB).

Reportedly, the SARB issued a tender notification on its website, inviting a few individuals for a closed meeting. The tender notification read:

“Request for expression of interest from prospective solution providers in anticipation of a feasibility project for the issuance of electronic legal tender – a central bank digital currency issued and backed by the South African Reserve Bank.”

A software developer looking to engage with the SARB on the project disclosed this information. The developer, who wished to remain anonymous, revealed that a meeting was held at the SARB offices on May 14, 2019. The meeting was attended by a handful of people mostly, software developers and one cryptocurrency exchanges.

SARB is exploring the possibilities of creating a central bank digital currency to be used in South Africa. In the meeting, the SARB reportedly admitted that digital currencies are the future of commerce that increase consumer safety and reduce the financial burden of managing physical cash. They wrote:

“During the latter part of 2016, the Currency Management Department of the SARB mandated a core project team to investigate the case for a domestic central bank digital currency, issued and backed by the SARB.”

Additionally, SARB highlighted the importance of “financial inclusion,” stating that a digital currency could have a positive effect on South Africa’s population. The SARB acknowledges that this project is likely to face several issues. One of the main concerns is the stability of commercial banks in the country. Ideally, adopting a digital currency would see actual obsolescence of commercial banks as their main goal is to manage real money. In the meeting, SARB emphasized that they want to create digital currency without destabilizing the commercial banks’ industry.

Other concerns on the projects include how the SARB plans to distribute this digital currency in relation to circulating rand. The meeting ended with SARB calling out to companies to be involved in the process. The bank emphasized that it is still in an exploring phase. The SARB stated:

“During the execution of this project, the interaction will be required with the Fintech Unit and program team to exchange and benefit from the skills, learnings, approach and policy determinations that emerge from both streams.”

Kudi Exchange to launch app in Africa

Kudi Exchange, an African based crypto mobile app, is planning to launch in Africa. The exchange has just completed its beta stage and is expected to make the app open for the public next week.

Kudi Exchange is purportedly the only exchange in West Africa that allows users to purchase Gemini” US dollar backed stable coins directly using local currencies. Users can also see the platform to send money to others using SMS numbers, or their WhatsApp. Crypto users will also purportedly get an opportunity to enjoy cheaper transaction rates compare to other platforms.

Additionally, Kudi’s app has additional features for businesses like the ability to use their phones as great point of sales systems or payroll systems. In their website, the exchanges claim that:

“It is designed and built to serve the African market. We understand that Africa has great opportunities as well as unique challenges in the crypto / digital asset space. Through Kudi Exchange, we plan to help drive the adoption and use of digital assets across the African continent.”