South African Ethereum Project Earns Global Banking Award

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Central Banking, a global consortium that deals with matters related to national currencies and monetary policy, has recognized the efforts of the South Africa Reserve Bank in implementing blockchain solutions. The sovereign bank received the 2018 Financial Technology Innovation for Project Khoka, which was developed to process interbank payments and transactions.

Project Khoka Development

To develop Project Khoka, Reserve Bank officials chose the Ethereum open source distributed ledger, thereby creating a centralized blockchain to support a digital token of the rand, the South African digital currency. This blockchain was modeled after a distributed ledger solution designed by banking giant JPMorgan Chase, and the goal sought by the Reserve Bank is to improve the flow of transactions between national banks.

It took three months to develop Project Khoka, and the positive results were immediately observed. The blockchain was able to scale payment volume to 200,000 transactions per day, a considerable improvement when considering that the traditional system can presently handle 70,000 transactions in a 24-hour period.

Aside from improving the time it takes to process interbank transactions backed by the digital version of the rand, this South African blockchain also provides security, privacy and the ability to display transparency should it be requested by other government agency, regulators or the public. While Project Khoka is highly automated, the Reserve Bank is still able to implement the oversight that is called for in this kind of financial networks.

Central Bank Support For Ethereum

This implementation of the Ethereum blockchain by a sovereign central bank is nothing new. The Russian ruble and the Singaporean dollar have already been digitized on this blockchain, and JPMorgan Chase intends to continue seeking major partners who wish to speed up their financial networks. The next step would be to make these tokens available to the public, and this could happen in the near future with the Eastern Caribbean dollar tokens.

All these positive developments involving the Ethereum blockchain should be good news for investors; however, they have failed to boost the value of the Ether token, which is unfortunately at the mercy of the global cryptocurrency market. With Bitcoin having suffered major setbacks this year, Ether has also lost considerable value.

As of early September, ETH/USD was trading under $200, a far cry from the levels it was trading in early January. Still, the Ethereum blockchain leads all other distributed ledgers in terms of real-world applications, and it could soon be the first blockchain to offer wide circulation.
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