The head of the South African central bank has insisted that regulators and policymakers should be involved in directing any potential move to markets that are based on distributed ledger technology (DLT).
Pondering 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.” In his virtual address following the launch of the Project Khokha 2 (PK 2) report, Kganyago shared his views concerning the future of central banks in a world that is based on the principles of decentralization. He said:From a regulatory perspective, I think it is unlikely that decentralised markets will be suitable in all instances or that decentralisation will guarantee the achievement of public policy objectives such as consumer protection, financial stability as well as safety and soundness, which fall within the mandates of central banks and regulators.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.
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