Regulators and banks are now testing a ‘digital currency’ system in South Africa
The Intergovernmental Fintech Working Group (IFWG) has announced the launch of ‘Project Khokha 2’ – a project which aims to explore the use of tokenised money, blockchains and digital currency in South Africa.
This comes after the group’s first Project Khokha test which looked at using blockchain technology to speed up payment systems in the country.
As part of Project Khokha 2, the IFWG said it will further investigate the use of Distributed Ledger Technology (DLT) in the country’s financial sector.
Distributed ledger technology (DLT) is a digital database system for recording the transaction of assets in which the transactions and their details are recorded in multiple places at the same time.
DLTs are currently most closely associated with blockchains – the system underpinning cryptocurrencies like Bitcoin. However, blockchain technology is only one type of application of DLTs.
As part of the project, the group said that it will also work with a number of new technologies including tokenised money and a wholesale central bank-issued digital currency.
You can read a more detailed technical breakdown of the project here. Participants that will join the IFWG on Project Khokha 2 include:
- Absa;
- FirstRand;
- Investec;
- The Johannesburg Stock Exchange (JSE Limited);
- Nedbank;
- Standard Bank;
- Strate.
Members of the IFWG include the Competition Commission, the Financial Intelligence Centre, the Financial Sector Conduct Authority, the National Credit Regulator, National Treasury, the South African Revenue Service, and the South African Reserve Bank.
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