How the Reserve Bank is experimenting with blockchain tech in South Africa

Earlier this year, the South African Reserve Bank (SARB) revealed its plans to launch an initiative called Project Khokha, to experiment with distributed ledger technologies.

The project’s goal is to replicate interbank clearing which currently runs on the South African Multiple Option Settlement system.

The head of financial technology at the Reserve Bank, Arif Ismail, told MyBroadband they have now partnered with ConsenSys to implement a permissioned blockchain called Quorum, which is based on Ethereum.

Eight banks have signalled interest in being nodes on the network and tests of the system have already commenced, said Ismail.

The test is intended to allow the SARB and the banking industry to collaboratively assess the potential benefits of distributed ledger technologies.

Ismail said they will set up test cases that are as real as possible, but emphasised they will purely be for testing.

Real transactions will not be processed on the blockchain.

This will allow them to stress test a distributed ledger platform to gauge how it responds, and gain insight into the security aspects of moving a token within the network.

Through the proof of concept that ConsenSys developed with the industry, the SARB and the participating banks hope to gain a practical understanding of the technology.

Ismail said they hope to produce a report on this by May 2018, but did not guarantee that a report on the tests would be published.

Blockchain interest

The move by the SARB follows many large companies implementing or researching the use of blockchain technology.

The latest multinational to get on board is Samsung, which is considering a blockchain ledger system to keep track of global shipments.

Samsung’s global shipments are immense and worth billions of dollars each year, and would be a big victory for blockchain tech if successful.

Samsung SDS – the group’s logistical and information and technology arm – said the blockchain system could cut shipping costs by 20%.

“It will have an enormous impact on the supply chains of manufacturing industries,” said SDS.

Now read: SARS details its Bitcoin tax plans for South Africa

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How the Reserve Bank is experimenting with blockchain tech in South Africa