CJ - Cryptocurrency Specialist
The launch of the digital currency issued by South Africa's central bank has advanced (CBDC). This comes after the South African Reserve Bank's project's technological proof-of-concept was finished (SARB).
The initiative was dubbed Project Khokha 2 (PK2), and it was the second phase of the SARB's Project Khokha 1 (PK1), which began in 2018.
The project successfully replicated the banks' interbank payments settlement using distributed ledger technology (DLT). Real-time gross settlement system "SAMOS."
In February 2021, the project's second phase, PK2, was initiated. Within the proof-of-concept context, this project tested DLT with clearing, trading, and settlement.
Absa, FirstRand, JSE Limited, Nedbank, and Standard Bank were among the industry participants. The Intergovernmental Fintech Working Group is made up of these individuals (IFWG).
Using this technology, the SARB assessed the debt instruments that were issued and offered two options for settlement payments. The first option is a wholesale central bank digital money (wCBDC). The second option is a wholesale settlement token (wToken), a commercial bank created with private funds.
Two DLT systems were developed as a result of the proof-of-concept. The first acted as a decentralized cryptocurrency trading platform, while the second oversaw the CBDC.
The project's findings highlighted the regulatory, commercial, and operational advantages that DLT may bring to the market. According to the SARB, this technology will be able to consolidate duties and services that are currently carried out by various infrastructures onto a single platform. This has the ability to save expenses and simplify things.
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