Banks working on new payment system
The World Bank is working with the Central Bank of Samoa (C.B.S.) on a real time payment system that would address any need for having a digital currency.
This is according to C.B.S. Governor, Maiava Atalina Ainu’u-Enar, who was responding to the question on whether the Central Bank will consider issuing a digital currency for Samoa in the future.
“Because digital currency is promoting that it would make it easier for payments to be carried out, but if you have a real time payment system, you don’t need a digital currency,” Maiava told the Sunday Samoan.
“Central bank digital currency was one of the issues discussed during the Governors meeting, the consensus was we are not desperate and we are not there yet, we are working on our payment so that would be a real time settlement.
“So that in itself will address any need for a digital currency because once you have a payment system that is real time settlement, you can clear anything at that very moment, so if you have a cheque that you want to cash out at another bank, you don’t have to wait a week to clear that cheque, you will instantly know whether there’s cash in that account or not.”
Maiava explained the legal framework is already in place in Samoa, and the World Bank is now working with them as regulators to implement the real time payment system.
“We’ve already passed the law - National Payment System Act in 2014. So we have the legal framework in place, we just need the payment system to be in place,” Maiava said.
“If we have that system in place, there’s no need for digital currency. Real time payment system has no risks because it involves all players in the financial system especially the commercial banks, so they are all linked, and any transaction that goes into the system is picked up by any client.”
Maiava this is one of their approaches to ensure that Samoa is not left behind with the new innovations and technological changes.
“This is something we are working towards, so we are going with technology, it’s always the case that in any country, regulation always lacks behind technology because of the fast pace of technology these days,” she said.
“Our approach to that is we want to work with the technology people, we want to know what’s happening, give them that space to work for them to provide that service while we control it in a controlled environment like we monitor it. Once we know that it is safe, than we will open it up.
“It’s what we called regulatory sandbox we allow the vendor, or allow the person with the innovation to progress with that innovation but in a supervised environment, so we know the risk at that time and we address it before we open it up. This is the same approach that’s been adopted by other countries in the region, in that way we don’t hold back on innovation and technology and try and suppress it, but we allow it to develop.”
Maiava said this is why they are advising that people let them know on the new types of technological innovations.
“We need to license it, so that we can work with them because we need to know that these are all new technologies and we need to understand how it works, the framework, the mechanics of it in a controlled environment, because by doing that we will know the risks, minimize it before opening it. That’s our approach in terms of all these new technologies that’s come up.”