By The global banking forum is known as the Central Bank recently awarded it’s Fintech & RegTech Award for Best Distributed Ledger Initiative to the South African central for their stellar work on the successful Project Khokha.
This project successfully utilized an Ethereum blockchain platform in order to process interbank payments & settlements.
This experiment proved that distributed ledger technology or DLT can be utilized to enable digital instead of analog transaction processing which offers notable improvements for global transactions.
Central Banking also made it clear on their site the benefits of the test’s success and how this demonstrates the need for regulators to address banking security & privacy concerns when it comes to improving global transaction processing on a whole.
Realistic Simulated Test Conditions:
Project Khokha was designed and executed by the South African Reserve Bank in under three months in order to test proficiency, resilience, confidentiality, finality and scalability aspects of a DLT system for use processing transactions under realistic conditions while on a wholesale payment system. 
The bank made use of JP Morgan Chase’s Quorum network along with Istanbul Byzantine fault tolerance and Pedersen commitments and range proofs.
Furthermore, participating banks made use of their nodes enabling them to pledge, track and redeem tokenized Rands on the ledger with the main goal of the project being to successfully process transaction while still adhering to the Principals For Financial Market Infrastructures. Finally, the project also yielded successful goal benchmarks for transaction times, performance, security and of course privacy.
One of these goals included scaling from 70, 000 to 200, 000 daily transactions, based on real-time settlement needs for South African banks. Another goal was the processing of a full day’s trading in two hours while coping with a one-day loss of processing.
Established Benchmarks Post Test:
Amazingly, the central bank managed to reach the goal of 95% of transactions validated in less than one second with 99% being processed in two seconds. The central bank reserved the rights to the visibility of all transactions but participating banks did not have the same privilege.
Settlement finality, complete transactional privacy and the managing of the daily volume were managed in under two hours by the network. Regulatory oversight of transactions processed under two seconds was also retained by the central bank and these transactions were sent across a network of nodes which were distributed geographically.
Lastly, Central Banking noted that in order for innovation to take front-seat in the future, regulators would need to begin working together in order to protect the financial systems.
Do you think this successful test could lead to better awareness of blockchain systems? Let us know your thoughts.
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