Blockchain Project Result Released By South African Reserve Bankbr>
The South African Reserve Bank (SARB), the central bank of the country, has released the results of Project Khoka, a proof of concept (PoC) for interbank transfers using Quorum, JP Morgan‘s private, ethereum-based platform.
First announced in February of this year, Project Khoka focused on providing participants practical experience on aspects of using blockchain technology in a realistic test environment where different deployment models were utilized. The goal of the project was to build a PoC wholesale payment system for interbank settlement using a tokenized South African rand on distributed ledger technology (DLT).
A total of seven South African banks participated in the pilot. These include Absa, Standard Bank, Capitec, Discovery Bank, FirstRand, Investec and Nedbank. The seven banks each built their own nodes on the networks, using a mix of physical and cloud-based virtual machines.
According to the central bank, the pilot showed that the typical daily volume of the South African payments system could be processed in less than two hours with full confidentiality of transactions and settlement finality.
“Transactions were processed within two seconds, across a network of geographically distributed nodes, with distributed consensus providing the requisite resilience,” the bank said. “The SARB was able to view the detail of all the transactions to allow for regulatory oversight.”
The project made use of Pedersen commitments and range proofs to deliver on the combination of scalability, resilience, confidentiality and finality. The Pedersen commitment scheme allows a sender to create a commitment to a secret value. They may then later open the commitment and reveal the value in a verifiable manner that binds them to their commitment.
“This project has laid the foundations for future collaborative work – essential in the blockchain context – and has fulfilled its objective of providing useful insights to all participants,” the SARB said. “This report notes that there are many issues to consider before the decision to take a DLT-based system into production can be taken. Some of these issues relate to the practicalities of implementation, but also to legal and regulatory factors and to the broader economic impact.”
The SARB said the full results of the pilot will be released through the course of the year. It added that the next step may be an economic impact analysis of the implementation of DLT under a number of scenarios.
“Such a study would need to consider varying degrees of DLT usage in the economy and would be an important parallel piece of work to further experiments with the technology,” the SARB said.