South African Bank Launches Ethereum PoC

South African Bank Launches Ethereum PoC

The central bank of South Africa has reportedly launched a new proof-of-concept (PoC) project that is based on the Ethereum blockchain and whose goal is to replicate interbank settlements.

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The central bank of South Africa has reportedly launched a new proof-of-concept (PoC) project that is based on the Ethereum blockchain and whose goal is to replicate interbank settlements.

According to an article published at CCN, the South African Reserve Bank (SARB), the country`s central bank, has announced a new project that is related to financial technology and will consist of a blockchain PoC endeavor realized through a collaborative work with a world-leading expert on Quorum, ConsenSys. ConsenSys will assist the SARB in the design, set-up of infrastructure and running of the POC.

As the media statement of SARB makes clear, there are three main objectives to start dealing with this FinTech Programme:

  • The first objective is said to be reviewing the SARB`s position on private cryptocurrencies. This would perhaps contribute to informing an appropriate policy framework and regulatory regime. The review will address regulatory issues like clearing and settlement risks, exchange control impacts, monetary policy and financial stability, and other issues such as cybersecurity considerations.

“Through collaboration with the other regulatory bodies, matters such as tax implications, consumer and investor protection, and money laundering activities will also be addressed. The SARB expects to complete the review in the second half of 2018.”, as the bank writes in their press release.

  • The second objective is to investigate and consider the applicability of innovation facilitators for the SARB. Under the term “innovation facilitators” the bank means innovation hubs, regulatory sandboxes, and accelerators.

“The SARB hopes to have concluded its assessment of the appropriateness of innovation facilitators by the third quarter of 2018. Clear and transparent eligibility and participation criteria will be developed to assist in the consideration of applicants into a regulatory sandbox.”, according to the bank.

The third objective is to launch Project Khokha that will experiment with distributed ledger technologies (DLTs). The goal is to understand the practical side of DLTs through launching a proof of concept (POC) in a joint effort with the banking industry.

SARB writes they will release a public report showing the findings, risks, and benefits that are associated with the project. It will be available during the second quarter of 2018.