The south African Reserve Bank (SARB) is partnering with quorum a JP Morgan blockchain company to build a proof of concept token on the Ethereum blockchain, this initiative tagged “project Khokha is designed to help the South African banking sector settle interbank settlement and clearing issue plaguing the banking sector of the country.
This does not come as a surprise as early this year, the south African central bank issued a statement saying it is exploring a possibility with blockchain technology to help in solving some of the challenges faced by the banking sector of the country.
The SARB is also partnering with ConsenSys, a Brooklyn based blockchain enterprise, the brain child behind the proof of concept protocol which will enable the processing of “wholesale payment using Quorum’,
In the official statement released by the South African Reserve Bank (SARB), some part reads
“The aim of this project is to gain a practical understanding of distributed ledger technologies (DLTs) through the development of a proof of concept (PoC) in collaboration with the banking industry. The objective of the PoC is to replicate interbank clearing and settlement on a DLT which will allow the SARB and industry to jointly assess the potential benefits and risks of DLTs.”
Although, this development is contrary to a statement by the deputy director of the south African central quoted saying that the issuance of Blockchain cryptocurrency by the central bank of south Africa will be too “risky”.
The issuance of the Poc by the central bank of Singapore might have served as a source of inspiration to the Central Bank of South Africa .
Although, the SARB has insisted that this proof of concept project does not in any way suggest that Blockchain will be powering the country’s payment system. That is just an experiment to understand the pragmatic effects blockchain technology could have on the economy and how best to propose a mass adoption. This development put South Africa ahead of other African countries in the adoption of Blockchain technology by a mainstream sector.