Exploring the use of distributed ledger technology for interbank payments settlement in South Africa
Project Khokha is a collaborative project led by the SARB and involving a consortium of South African settlement banks as well as technical and support partners. The goal of the project was to build a proofof-concept (PoC) wholesale payment system for interbank settlement using a tokenised South African rand on distributed ledger technology (DLT). The project commenced in January 2018 and ran for 14 weeks.
It is the first project initiated by the recently constituted Fintech Unit in the SARB. Project Khokha builds on the initiatives previously undertaken by other central banks, including those of Brazil, Canada, Europe, Japan and Singapore.
These projects have typically been rapid builds of PoCs exploring the use of DLT in a banking context. This report identifies three ‘waves’ of this type of work. The first wave consists of simple PoCs built using Ethereum. The second wave takes this work and investigates the interconnected issues of scalability, resilience, confidentiality and finality. The third wave, which is just starting, diverges into areas such as securities settlement and cross-border transactions.
Project Khokha forms part of the second wave and was designed to provide a realistic test of a DLT-based wholesale payments system. In particular, it investigates whether confidentiality could be achieved at scale, i.e. with production-level volumes, and whether multiple node types, each configured by a participating bank, could be accommodated.