The use of blockchain technology is fast growing in practically every country. Currently, 80 percent of Central Banks are studying and developing blockchain technology use applications in order to create a better credit system.
However, many concerns remain before this technology is adopted, and development work is an important component of the adoption process at this stage.
According to a report, the Intergovernmental Fintech Working Group and the South African Reserve Bank had just finalized a collaborative proof-of-concept effort to bring policy and legal aspects of introducing the DLT into place (distributed ledger technology).
“Khoka 2” is the name of this experimental project. Khoka 2 aims to make it easier to settle funds through the use of blockchain-based tokens under a certain policy that will be implemented after these agencies’ next effort.
The project experiment revealed that some important policy education is required, as well as the involvement of legislators and regulatory agencies in the country.
So, conversely, we could claim that the project’s experimentation confirmed its abilities to function as a payment network, but that there is greater support from investors and financial policies in place to make things credible to be used at the official level.
“Transitioning to a DLT-based system necessitates meticulous preparation and execution, and may entail running a DLT-based system in parallel with the present system for some time, possibly indefinitely,” they added.
The Central Bank’s governor, Lesetja Kganyago, made a comment on the project’s results, emphasizing the importance of regulatory approval for DLT use cases.
He said: “Practical examination should lead to more legislative clarity — for both entrepreneurs and policymakers — and should be in the larger interest of guaranteeing a fair competition for all market participants.”
As a result, comments from the Central Bank governor attempted to underline the need for increased policymaker and stakeholder engagement in order to provide clearer clarity on the usage of DLT.
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