Central Bank of South Africa won for its project Khokha successfully used on the Ethereum on the Ethereum Blockchain Platform to process interbank payment and settlement. A global central bank forum, Central Banking award FinTech & RegTech Award for Best Distributed Ledger Initiative to the bank.
The test described that distributed ledger technology (DLT) could allow digital as opposed to analog transaction processing, offering significant changes for global transactions. Central Banking recorded on its website that the test’s success shows the need for regulators to address banks’ security and privacy concerns to enhance global transaction processing.
The Reserve Bank of South Africa planned and executed Project Khokha in under three months to test the resilience, proficiency, finality, confidentiality, and scalability of a DLT solution for handling transaction under the realistic condition on a wholesale payment system. The bank utilized JP Morgan Chase’s Quorum Network Istanbul Byzantine fault tolerance and Pedersen responsibilities and range proofs.
The participating banks formed their nodes and were able to pledge, track and redeem and tokenized and on the distributed ledger. The project’s primary objective was to successfully process the transactions while abiding by the principles for Financial Market Infrastructures. The project also set measurable goals for performance, transaction time, security and privacy.
One objective was to scale 70,000 to 200,000 daily transaction based on real-time gross settlement wants for South African banks. Another way to process one day’s trading in two hours while coping with a one-day loss of processing.
The bank achieved the goal of 95% of the transaction in under one second, and 99% of the transaction approved in less than two seconds. The central bank could see all, yet the participating banks couldn’t see each other’s transactions. It further managed the daily volume in less than two hours, gave settlement finality as well as complete transactional privacy. The bank also maintained regulatory oversight of transactions that are processed in under two second.