South African Reserve Bank Bags Award For Blockchain-based Initiative

Sep 10, 2018 at 23:23

South Africa’s central bank has bagged the “Best Distributed Ledger Initiative Award” in the inaugural Central Banking FinTech RegTech Global Awards 2018.

Amid security and privacy concerns, the South African Reserve Bank (Sarb) launched “Project Khokha” to test distributed ledger technology (DLT) initiatives that comply with payment regulators.

The project aims to assess the performance, scalability, privacy, resilience and finality of a DLT solution under conditions as realistic as possible to those in the banking sector.

Built on JP Morgan Chase’s Quorum network—which is based on Ethereum, the project was developed in under three months.

It was successfully tested with seven banks namely Absa, Standard Bank, Capitec, Discovery Bank, FirstRand, Investec and Nedbank last June.

These banks set up their own nodes, combining physical and cloud-based virtual machines. Payments were then processed using a digital token equivalent of the rand, South Africa’s fiat currency.

This successful initiative earned Sarb the maiden global banking award.

“The distributed ledger technology (DLT) sector is growing quickly, and innovation is paramount to its successful development, Promoters wager it will revolutionise how transactions are processed globally, shifting from an analogue to a digital system,” Central Banking Publications said.

Central Banking launched its first annual FinTech & RegTech Global Awards to recognize technological innovation adopters to improve central banking across the monetary policy and financial stability planes.

“So far, regulatory oversight has been slow to catch up, and systems and regulators now need to work together to safeguard the financial system without stifling innovation,” Central Banking said.