A number of important developments have occurred so far in 2018 that involve governments and central banks exploring potential applications of blockchain technology.
It has long been the aspiration of crypto community that distributed ledger technology (DLT) will one day be utilized on the largest of scales. While this goal has yet to be realized, significant steps are being taken in the right direction.
For example, National development banks in the BRICS nations (Brazil, Russia, India, China, and South Africa) recently agreed to a research project that will explore new blockchain research aimed at developing a digital economy.
South Africa Reserve Bank’s Project Khokha
In addition, the central bank of South Africa announced in June 2018 that it conducted a successful 14-week trial of blockchain tech. According to the report, the trial involved settling 70,000 payment transactions in a total of two hours, with each transaction taking about 2 seconds to confirm. This outstanding feat was accomplished while maintaining anonymity for all transactions.
In the “Project Khokha” paper, Francois Groepe, Deputy Governor of the South African Reserve Bank (SARB), referred to the fact that blockchain technology is altering the current financial landscape at a blistering pace:
“The role of banking institutions, central banks and financial market infrastructures, both domestically and internationally, is being disrupted at a rapid pace by innovative and emerging technologies. Instead of ignoring these developments, the South African financial services industry has risen to the challenge of learning, growing and understanding the implications and opportunities that they present in a South African context.”
The paper goes on to describe the goals of Project Khokha. The project was spearheaded by the SARB but was also conducted “together with the national banking community.”
“Project Khokha…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…”
The SARB has stated that in spite of the project’s success, it has no plans to replace existing financial systems with a blockchain-based system. Before taking such steps, the bank said it needs to conduct further research as well as establish adequate regulatory standards. However, it also made clear that the success of the project has answered many questions and laid the foundation for future inquiries into blockchain technology.
Avesta Blockchain Technology and Financial Transactions
Blockchain platforms like Avesta can be used for point-of-sale transactions as well as large institutional transactions required by governmental entities.
Those in both the private and public sectors can use Avesta tokens for all their financial needs. With low fees and fast transaction times, banks in Africa and elsewhere can benefit from the Avesta platform.
In sum, the central bank of South Africa and many other banking institutions around the world continue to appreciate and investigate the significance of blockchain technology and its potential use cases in the broader financial system.
While today crypto is most often used by individuals on a small scale, this may change in the near future. There may come a time when most, if not all, financial transactions will be conducted using blockchain technology.