12 December 2017
Carlo R.W. De Meijer

Blockchain Observations

Carlo R.W. De Meijer - MIFSA

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South Africa and Blockchain: changing the face of Africa

15 November 2016  |  7411 views  |  0

Next week we are leaving the Netherlands for a three-and-a–half week trip to South Africa. A yearly returning and exiting event across this intriguing country and their neighbors. Being a regular blogger on blockchain I am curious what South Africa was doing with this new disruptive technology. After having done somewhat research the picture that came to me was that blockchain has “grabbed the attention of private financial institutions” in South Africa. But also regulators including the South African reserve Bank (SARB) and others are increasingly looking at the blockchain.

  • Blockchain Africa Conference 2017

The first thing I saw when Googling was the announcement of the Blockchain Africa Conference 2017, that will take place in Johannesburg from 1-3 March next year. This will be the third Blockchain  Conference in a row in South Africa, following the Bitcoin & Blockchain Africa Conference in 2015 in Cape Town and its second conference in 2016 in Johannesburg. Both conferences were a “huge success” and were attended by international and local delegates showing the great interest in blockchain technology. The Blockchain Africa Conference 2017 will bring together a diverse range of experts who will discuss all the opportunities, challenges and exciting possibilities in innovation and disruption that can be leveraged in Africa using this technology.

  • Lot of interest from  all the big banks in South Africa

My research showed that there is a lot of interest, especially from the large banks just like everywhere else in the world. Since 2015, all the big banks in South Africa starting to engage on blockchain, actively investigating the potential of the technology. South African Banks are now also  investing in the blockchain technology, and are beginning to experiment with blockchain technology as a way to streamline processes, saving time and money. A number of domestic banks have been involved in tests using Ethereum, and startups working in the country have explored use cases like crodfunded energy.

“All South Africa’s leading financial institutions have some proof-of-concept or early stage technology related to the blockchain”, Ross A. Mauri, general manager IBM’s z Systems.

  • South African Reserve Bank Circulates First Ever Smart Contract Using Private Ethereum Blockchain

Another – and even more important announcement was the circulation of the first ever (in Africa) smart contract using a private blockchain platform. The South African Reserve Bank (SARB) along with the Payments Association of South Africa, Financial Services Board, Strate (South Africa’s Central Securities Depository) and some of the country's major banks, including ABSA and Standard Bank successfully managed to circulate a smart contract on an Ethereum based blockchain private network set up among themselves. Reports indicate that the financial services organisations involved in the project had developed and tested the solution for issuing syndicated loans via blockchain.

  • ABSA joined R3CEV consortium

ABSA, a subsidiary of Barclays Africa, and one of the leading banks promoting blockchain technology in South Africa announced that it had joined up with the international R3CEV blockchain consortium, representing over fifty major banks from around the world. ABSA is thereby one of the first African banks to do so.

“Barclays Africa has been experimenting with blockchain for some time. In mid-2015 we launched an Africa-wide blockchain supply chain challenge through our Rise open innovation platform. We also co-hosted the second Blockchain and Bitcoin Africa Conference in February this year, and we currently have over ten blockchain-based experiments and research initiatives that are being piloted within the bank.” Barclays Africa

  • South Africa’s largest banks set up a blockchain network

Africa's largest banks and South Africa’s Central Securities Depository have set up a Blockchain network.

Africa's largest banks and South Africa’s Central Securities Depository, Strate, set up a blockchain network that could have a far-reaching effect on the continent’s financial sector. The new working group has representatives from Standard Bank, ABSA, FirstRand, Nedbank - the top four banks in Africa - and Investec which stands at the eighth position. South African Reserve Bank (SARB) and the Financial Services Board will play a role of observers.

They will be working towards developing the African continent’s first distributed ledger-based banking solution. Their ongoing efforts are thereby aimed to connect aspects of the South African banking system via a private version of the ethereum blockchain. Early contenders for the first smart contracts to run on the South African ethereum banking network are syndicated loans and securities loans, which are currently run as over-the-counter operations.

  • Strate signed Letter of Intent to collaborate with Russia’s National Settlement Depository

South Africa’s Central Securities Depository, Strate signed a Letter of Intent to collaborate on initiatives using blockchain - or distributed ledger technology - with Russia's National Settlement Depository which was one of the first financial organizations in the world that announced the development of a blockchain-based prototype of e-proxy voting. The move is to forge a partnership between the two CSDs to develop solutions utilizing blockchain with the first use case focused on proxy voting.

  • South African Central Bank 'Open' to Blockchain and Cryptocurrency

South Africa’s central bank is “open” to cryptocurrencies and blockchain, according to new statements from its governor. In a speech at a cybersecurity conference held in Johannesburg, governor Lesetja Kganyago indicated that the South African Reserve Bank is exploring the technology and interested in innovations that may stem from its development. The remarks suggest a greater degree of interest on the part of the central bank in the technology.

  • Bankymoon’s Solution: the Blockchain Smart Meter

Bankymoon, a South African based software company, has already developed a blockchain application that can be applied to any smart meter. These pre-paid blockchain smart meters are being implemented by Bankymoon throughout South Africa. Each meter has one or more digital wallet addresses connected to it. They are loaded by sending digital currency to the address. When a deposit is made, the customer’s account is credited at the current exchange rate. 

  • The Blockchain Academy: What they do

The Blockchain Academy, founded in 2015, was established to help individuals in South Africa better understand how this technology can improve incumbent organisations, systems and processes so that they can develop their own applications using this innovative and disruptive technology.

The Blockchain Academy provides training (at their office at the Bandwidth Barn, in Woodstock, Cape Town as well as at AlphaCode Club in Sandton, Johannesburg) for financial institutions, organisations, corporates, developers, entrepreneurs, startups, schools and government on digital currencies and blockchain technology.  

  • Changing the face of Africa

     “The emergence of blockchain technology, big data, on-demand services, cloud computing and the Internet of things (IoT) are all spurring inclusive growth on the African continent. And it is the convergence of these exciting technology innovations that is changing the face of Africa,” Van Der Beek, Goodwell Investments
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