Financial Regulators looking to test Digital Currencies in South Africa

Regulators and banks want to test digital currencies in South Africa, therefore, the Intergovernmental Fintech Working Group (IFWG) recently launched the ‘Project Khokha 2’. Project Khokha 2 will explore digital currencies in South Africa with the use of blockchain technology.

Digital Currency System in South Africa

Khokha 2 came after the first Project Khokha test using blockchain technology to make payments systems faster. Meanwhile, IFWG will conduct further research on the use of Distributed Ledger Technology (DLT). Also, as part of Project Khokha 2, this research aims to integrate DLT into the country’s payment system.

Distributed Ledger Technology (DLT) is a digital database system for recording asset transactions in multiple places at once. In comparison, the DLT technology is like the blockchain technology that records cryptocurrency transactions. However, blockchain is more like one type of DLT use case.

As part of Project Khokha 2, IFWG said it would work on new digital currency systems, including tokenized money. Likewise, the group proposes a central bank-issued digital money.

Members of the Intergovernmental Fintech Working Group (IFWG) are the Financial Intelligence Centre and the Competition Commission. Likewise, the National Credit Regulator, the National Treasury, and the Financial Sector Conduct Authority. Finally, the South African Reserve Bank and the South African Revenue Service.

Organizations that will participate in Project Khokha 2 alongside IFWG are:

  • The Johannesburg Stock Exchange (JSE Limited)
  • Standard Bank
  • Absa
  • FirstRand
  • Strate
  • Nedbank

You can read more about Project Khokha 2 and its details here.

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