CAPE TOWN: The central bank of South Africa has expressed its willingness to look into blockchain and distributed ledger technologies. Speaking at the Cybersecurity Conference, Lesetja Kganyago, Governor of the South African Reserve Bank (SARB), said that as new financial products and services emerge from fintech innovation, the central bank will have to consider their implications for the way in which it conducts its oversight functions as well as monetary and macroprudential policy.
Kganyago emphasized that the SARB has a balanced approach to technological innovations. He said that the bank is open to innovations including cryptocurrencies and blockchain technology. “As a central bank, we are open to innovations despite the different opinions of regulators on matters such as crypto-currencies. We are willing to consider the merits and risks of block chain technology and other distributed ledgers”, he said.
However, he said that with the expansion of digital footprint, the threat of cyberattacks also rises. To that end, he said that even central banks are not immune to such attacks, and noted the reported attacks on SWIFT, the financial messaging network that underpins most international money transfers.“As a central bank and a regulator in the financial sector, the SARB would be remiss in its duty if it ignored the growing risks emerging from the financial services sector’s increasing reliance on cyberspace and the Internet”, Kganyago said.
He further pointed out that motives for cyberattacks are not just limited to theft and often extend into a more “sinister” realm. He stressed that regulatory authorities must consider the possibility of systemic risks in the financial ecosystem, such as hackers bringing down a critical financial infrastructure for a prolonged period of time and the consequences of such an event. “To this end, the SARB has established the Financial Sector Contingency Forum (FSCF), in which all the major financial sector stakeholders are represented. One of the responsibilities of the FSCF is to put contingency plans in place for such eventualities”, he added.
