A growing number of African banks are turning to the blockchain technology – a self-regulating system of decentralized, shared databases that might di
A growing number of African banks are turning to the blockchain technology – a self-regulating system of decentralized, shared databases that might diminish the cost of banking transactions.
Absa Bank, the South African subsidiary of Barclays Africa, has become the first African member to join the R3-led blockchain consortium. While African banks are relatively new to the field, they start to see the potential of the technology for the financial industry.
Blockchain solutions might be adopted by 15 % out of 200 global banks, according to a recent IBM survey. The system could drastically cut banks` spending on IT and operation expenditure. Moreover, it may diminish the extra costs for post-trade and securities servicing fees.
Taking roots in Africa
Many international and local delegates joined this year`s Bitcoin & Blockchain Conference in Johannesburg. The event brought wide range of experts who discussed how to implement the technology in South Africa. Moreover, in the country was launched a Blockchain Academy which provides training on digital currency for financial institutions, governments, corporates and entrepreneurs.
Other African countries like Kenya and Nigeria are also considering the implementation of blockchain. “Africa is the hotbed of innovative and disruptive financial technology based solutions e.g. M-Pesa.”, states the commercial blockchain accelerator BitHub on their website.
A testing period
African banks need to further explore and test the digital currency before it can be adopted for use. While some experts remain skeptical especially in terms of legal frameworks, others think that crypto-currencies may change the way we use financial services.
Meanwhile, in the UK, Barclays has supported the Circle app which uses the blockchain technology. “We can confirm that Barclays Corporate Banking has been chosen as a financial partner by Circle, and we support the exploration of positive uses of blockchain that can benefit consumers and society.”, said Barclays before the Guardian.