The SA Reserve Bank has been awarded the Best Distributed Ledger Initiative during the annual FinTech & RegTech Global Awards.
The SA Reserve Bank received the award for Project Khokha, an Ethereum blockchain platform that is aimed at processing interbank payments and settlements.
What is SA Reserve Bank Project Khokha?
Project Khokha is a Distributed Ledger Technology (DLT) solution that enables digital transaction processing instead of analog transaction processing. This is aimed at improving global transactions.
Upon successfully concluding the project, the SARB noted on their website that this goes to show that there is a need for regulators to strengthen security and privacy in banking. This will go a long way towards improving global transaction processing.
During the three-month trial period, SARB made use of JP Morgan Chase’s Quorum network. Quorum is the company’s Istanbul Byzantine fault-tolerant blockchain. The SARB created their own nodes and successfully performed transactions on the distributed ledger. All the while adhering to the South African Principles for Financial Market Infrastructures. Some of the goals included performing 70 000 – 200 000 transactions per day as well as increased security and privacy. Another goal that was achieved was coping one day’s trading in two hours.
Project Khokha saw interbank payments and settlements take place within a network of seven banks. Each conducted gross settlements of the Rand on the Quorum network. Overall, 95% of transactions were validated in under one second and 99% under two seconds. All the while, the bank could see the transactions occurring but the banks could not see one another’s transactions.
What could Project Khokha mean for South Africa?
Should the Reserve Bank decide to implement the blockchain technology, it could put an end to the high levels of corruption, money-laundering, and cybercrime in the country. It could make a big difference in South Africa’s current financial state. An added bonus is that it could also mean a reduction in high banking fees South Africans are expected to pay.
South Africa has joined the likes of Thailand, Malta, and Liechtenstein who is also looking at blockchain technology in its banking and economic sector.
Upon receiving the award, Central Banking praised the SARB for its successful project and praised them for their innovativeness. In a statement, Central Banking said the DLT sector is growing fast and those who promote it will revolutionize global transaction processing.
Central Banking is a global central banking forum who is head of the FinTech & RegTech Awards.