South African Reserve Bank’s FinTech Programme To Pilot Quorum For Interbank Transfers

February 22, 2018

The recently created FinTech Programme at the South African Reserve Bank is testing the waters for an Ethereum-based blockchain integration.

  • On February 13, 2018, the South African Reserve Bank (SARB) issued a statement regarding the three primary objectives of its FinTech Programme.

    First, the program will seek “to review the SARB’s position on private cryptocurrencies to inform an appropriate policy framework and regulatory regime.” A secondary objective is to test the viability of regulatory sandboxes. The third will be to launch Project Khokha, an Ethereum blockchain-based pilot built through a partnership with ConsenSys. 

    Project Khokha will attempt to replicate interbank transfers on Quorum, a private-facing Ethereum platform built by JP Morgan. ConsenSys will help to design and facilitate the proof of concept for the SARB. The project may eventually lead to future blockchain integrations, which can build on the knowledge gleaned from this pilot to become more efficient and secure.

    The FinTech Program is intended to tackle obstacles that stand before regulators, including risks related to clearing and settlement, exchange control impacts, and financial stability. These issues will be addressed in a collaborative effort with other regulatory authorities, such as tax and consumer protection agencies.

    The SARB is committed to testing the waters for blockchain systems, but such tests do not necessarily indicate a stark transition away from legacy systems. Per the document, “These initiatives aim to assist in the formulation of appropriate policy frameworks for the possible regulation of FinTech.”

    It is expected that a public report detailing the findings of the FinTech Programme will be released in the second half of 2018.

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