As cryptocurrencies and blockchain-based payments gain acceptance as valid alternatives to conventional fiat currencies throughout the globe, South African authorities are aggressively studying the viability of incorporating them into the country’s financial systems.
Specifically, as Bloomberg reported on April 6, the South African Reserve Bank and the Intergovernmental Fintech Working Group concluded a collaborative proof-of-concept initiative examining the policy and regulatory consequences of using distributed ledger technology (DLT).
The initiative, dubbed Project Khoka 2, included clearing and settling debentures via the use of blockchain technology and tokenized assets in order to influence policy and regulatory assessments. The Johannesburg Stock Exchange and South Africa’s top four banks were among the participants.
The trial indicated that the country’s politicians and regulators must be more engaged before distributed ledger technology can be integrated into its financial markets.
Additionally, project participants identified a need for new capabilities across all stakeholders, integration of new platforms with legacy systems, as well as new standards, best practices, and an ecosystem to support them.
“Transitioning to a DLT-based system needs careful planning and execution, and may include operating a DLT-based system concurrently with the present system for an extended period of time, maybe forever,” they added.
Lesetja Kganyago, the central bank’s governor, said in an online address in response to the project’s results:
“Insights acquired via practical investigation should result in increased regulatory clarity — for entrepreneurs and regulators alike — and should serve the wider goal of guaranteeing a fair playing field for all market players.”
He noted that authorities should exercise prudence while discussing laws and be “very cognizant” of the need for clarity before committing to distributed ledger markets.
Africa warmly embraces Cardano’s blockchain incubator
Meanwhile, the continent has got a pan-African incubator scheme called Ariob, which was created to accelerate the development of initiatives sponsored by Cardano’s innovation engine Project Catalyst, as revealed by the blockchain’s engineering and education team IOHK in a blog post on April 5.
According to the team, the establishment of Ariob would provide high-potential Catalyst entrepreneurs with “access to venture-building skills and resources to assist in the development of products that address real-world African concerns.”
Project Catalyst is one of the biggest decentralized innovation funds, focusing on Cardano ecosystem growth.