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The National Treasury and The Reserve Bank of South Africa have published a consultation document on overhauling national payment systems, in a move that could pave the way for greater integration of cryptocurrencies in the national economy.
The document, titled ‘Review of the National Payment System Act 78 of 1998’, is open for public comment, with the bank soliciting feedback on a raft of new proposals designed to support crypto payments and innovation.
Amongst the suggestions was one that would allow for a crypto-Rand token, which would enable the benefits of blockchain transactions for fiat payments. The measures could become law by 2020.
The document also suggests that consumer transactions and other payments should no longer be monopolised by banks, in light of significant innovation in the payment and financial sectors around cryptocurrency and other technologies.
The review is the most comprehensive update of payment systems in South Africa since 2008, which introduced subtle adjustments to existing laws to take account of emerging technologies at the time.
In the document, the bank said that there will soon be little difference between domestic and international payments, arguing that crypto payments in particular can reduce transaction costs and deliver more efficient payments, in calling for “adequate” regulation for the sector.
“As the payments industry moves towards a digital age and becomes increasingly innovative, and financial technology becomes more advanced, the emergence of new payment methods, technologies, services, risks, participants and ‘payment systems’ have become increasingly prominent and challenge the traditional payments regulatory landscape. The regulatory and legislative framework thus needs to be flexible and adaptable to these changes, and provide an enabling environment for innovation to thrive,” it noted.
According to the document, “The NPS Act has become outdated and does not provide an adequate framework for the effective regulation of the NPS. This may be problematic as payment systems are a gateway to economic activity between consumers and businesses, and contribute to the well-being of South Africans. It is therefore crucial that payment systems are adequately regulated to ensure their continued safety and efficiency.”
The proposals are open to comment until the end of February.
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