##b endevours to increasingly establish an enabling regulatory environment for innovation to take place. one of the benefits of payments innovation is the potential expansion of access to financial services and achieving financial inclusion to reach the under - and unserved see the national payment system act, available at www. resbank. co. za > regulation and supervision > national payment system ( nps ) > nps legislation. page 6 of 9 consumers and to reduce transaction costs while providing greater transparency with simpler products and greater convenience and efficiency. by leveraging technology and proactively shaping a conducive environment for innovation through regulation, the payments system can serve as a gateway to achieving financial inclusion and address the need to deepen and strengthen access for both consumers and providers. as the payments industry becomes increasingly innovative and continues to improve the traditional payments landscape, regulatory and legislative frameworks need to be flexible and adaptable to these changes and provide an enabling environment for innovation to thrive. furthermore, the regulatory framework should remain robust and resilient to risks that may be posed to the safety and efficiency of the payments system. a number of developments have necessitated a rethink of the adequacy and relevance of the existing payments regulatory framework. these include global policy developments, relating to financial inclusion, access, financial stability, financial integrity and competition, international best practice and standards, and recommendations from global policy - setting structures, including the assessments undertaken by institutions such as the world bank and the international monetary fund. how the south african reserve bank collaborates with the industry in 2015, the sarb initiated a project to develop a vision for the national payment system. this process culminated in the drafting of the national payment system framework and strategy : vision 2025 document ( vision 2025 ). the sarb is currently in the last phase of consultations with the industry regarding the strategies that will be implemented to advance the development of the national payment system. the vision 2025 process has and will continue to be consultative and collaborative. in march 2016, the sarb executive approved the establishment of an internal virtual currencies ( vcs ) and distributed ledger technologies ( dlts ) steering committee ( steerco ) and working group. subsequently, we established a fintech steerco and working group. these structures are tasked to strategically review the emergence of fintech initiatives and assess the related use cases. their primary responsibilities page 7 of 9 include the facilitation of the development and review of policy positions for the sarb across its

is conducted. in particular, it has affected the volume of international financial transactions. international transactions in goods and services have become considerably less important than financial transactions. the closely linked financial markets have changed the monetary transmission mechanism, and shocks that occur in one country can easily have an impact on other countries. as a transition phase of or perhaps as an alternative to globalisation, considerable emphasis has been placed on closer international co - operation, convergence and integration since the end of world war ii. many regional economic co - operation arrangements have been formed or are under consideration. the aim of these regional arrangements is to free international trade and financial transactions between a group of countries. but many of them also want to encourage the movement of labour across domestic frontiers and the eventual attainment of political unions. the establishment of the european union is, of course, the best example in this regard. this regional arrangement has created the largest government bond market in the world and led to the development of the euro into a major international currency. another important structural change in the world ’ s financial market has been the achievement of greater price stability. over the past twenty years the rate of inflation has declined dramatically in most countries of the world. the disinflation process was at first mainly concentrated in the industrialised countries. according to the international monetary fund the average annual inflation rate in the major advanced countries already started to decline from the early 1980s from 12, 3 per cent in 1980 to 1, 7 per cent in 2003. by contrast, the average inflation in emerging - market and developing countries continued to increase from 25, 0 per cent in 1980 to 107, 7 per cent in 1992, before declining sharply to 6, 1 per cent in 2003. these developments brought the average rate of inflation in the world as a whole down to only 3, 7 per cent in 2003. this disinflation process has been so strong that some countries even experienced declines in their average price indices. consumer prices have actually been declining in japan and hong kong for quite a while, while some other countries such as china recorded decreases for a short period. as could be expected, disinflation to low positive values has been accompanied by a corresponding decrease in short - term interest rates to low levels. finally the financial sector, just like all other activities in the world, has been severely influenced by the revolution experienced in information technology and telecommunication. in central banking the advances made in information technology and telecommunication have particularly led to a more efficient payment system catering for real