Following the release of the Khokha report 2, the Governor of the South African Reserve Bank (SARB), Lesetja Kganyago, has implored regulators and policymakers to play a critical role as financial technology continues to expand globally.
Central banks and regulators, according to the Governor, should ‘evolve alongside financial markets’ to guarantee that they remain relevant in future markets, just as they are now.
During the virtual speech, the Governor stressed the importance of regulators and policymakers participating since decentralized financial markets are unable to meet some public demands, such as Consumer Protection, Financial Stability and Stability, and Soundness.
The Governor, whose Central Bank gleaned some insights from testing blockchain technology for interbank settlement in the two Khokha projects, has also emphasized that policymakers and regulators can help shape a prospective shift to blockchain-based financial systems.
He even gave some pointers, such as examining the implications of innovation, promoting responsible innovation for the public good, and informing an appropriate policy and regulatory response.
Project Khokha 2, the country’s second phase of interbank settlement systems trials, began in February 2021 and entailed the establishment of two types of tokenized money to enable settlement between financial institutions.
SARB’s contribution to broader discussions surrounding the regulatory treatment of crypto assets and financial sector innovation, according to the Governor, is the Project Khokha 2 report.
Project Khokha 1 examined the use of blockchain for interbank settlements by successfully replicating some functions of the South African real-time gross settlement (RTGS) system on blockchain.
Sourced from BiTKE