South Africa’s Central Bank, known as SARB, has been working with an Ethereum-based blockchain system that aims to reduce transaction costs and times. There have been eight different financial institutions participating from it, including Absa, Capitec, Discovery Bank, FirstRand, Investec, Nedbank and Standard Bank. Moreover, ConsenSys has also participated in the tests.
SARB’s Blockchain Platform
One of the main goals behind this project is to handle an important volume of the central bank’s clearing system. At the moment, this is related to 70,000 transactions which the bank was able to process them in over two hours. On average, the bank was able to process transactions within 2 seconds with full confidentiality, and a 100% settlement rate, which is quite impressive. The platform is not ready to see the market and start operating, but this test left important results. Additionally, there are still ‘many issues’ to tackle and develop before launching the product.
The statement uploaded by the bank reads as follows:
“Some of these issues relate to the practicalities of implementation, but also to legal and regulatory factors and to the broader economic impact.”
The project aims to replicate interbank clearing that is now running on the South African Multiple Option Settlement system (SAMOS). But it is not intended to replace the SAMOS, instead it aims to provide a better understanding of how the interbank settlement system would integrate with the famous Quorum private blockchain platform. The bank has also decided to set up a task team that would monitor blockchain and virtual currency activities in the country.
Francoise Groepe, Deputy Governor, commented about the current situation of the blockchain and crypto market:
“Given the rapid developments in financial technology it is evident that we are potentially facing one of the most severe innovation and technology-driven disruptions to products and services, particularly in the financial sector space.”
Sygnia Launches Crypto Exchange
South Africa has a very active crypto community and its society has been very interested in how the market develops. There are many companies working with blockchain technology and offer different crypto-related solutions. Just to mention one of the different cases, Sygnia, an important financial company located in the country, has recently announced that it was going to launch a cryptocurrency exchange and a native virtual currency.
Magda Wierzycka, CEO of Sygnia, said that the cryptocurrency market is attracting domestic and international investors, and they want to be part of this market. The company is an important player in the region and is well positioned to be the first major financial services institution to offer crypto-related solutions and services to its customers. Mrz. Wierzycka has also talked about regulations. All over the world regulatory agencies are working so as to regulate the crypto market and control the activities that take place on it.
“We believe that South African asset managers have become too complacent about the corporate activities of JSE-listed companies,” she commented. “We intend to invest in companies that provide opportunities to unlock significant value by positive engagement with management.”