The South African Reserve Bank (SARB) and the Intergovernmental Fintech Working Group have successfully introduced distributed ledger technology (DLT) into traditional financial instruments.
The South African Reserve Bank states the favorable conditions for integrating DLT into the country’s financial markets. It was announced by Bloomberg, citing a joint report by the South African Reserve Bank and the Intergovernmental Fintech Working Group on the Project Khoka 2 — a test project for the blockchain technology implementation in the classical banking tools.
The recently completed project was experimental. The Project Khoka 2 studied blockchain-based innovations’ policy and regulatory implications in classical financial markets. The project concluded that South Africa has a favorable environment for a DLT-based platform and financial market tokenization.
In doing so, the South African Reserve Bank recommends that local policymakers, legislators and regulators strengthen their engagement with the fintech industry. This is what will integrate distributed ledger technology into the country’s financial sector. The Reserve Bank of South Africa also said it has high expectations for the active participation of regulators in the testing of blockchain-based financial tools.
The report also highlighted the need to identify new opportunities for all financial market participants through DLT-based solutions. The government will have to scrutinize the possibilities of financial instruments based on blockchain technology and allocate new regulatory standards.
SARB Governor Lesetja Kganyago said it is important to be careful when discussing rules for future regulation and be clear about distributed ledger technology.
