The bank also wants to use the platform to extend its business into China.
On Thursday, February 28, Standard Bank of South Africa indicated it is preparing to launch a blockchain platform allowing its corporate clients to engage in overseas foreign exchange trading.
According to financial technology newswire Finextra, which broke the news, the permissioned platform will be cloud-based and built on the Hyperledger Fabric blockchain platform; the system will be compatible with the bank’s existing foreign currency trading application, dubbed Shyft.
Speaking to Finextra, Richard de Roos, head of foreign exchange for Standard Bank, stated that, once launched, the new system will significantly shorten the time it takes to complete international trades and payments made to foreign exchanges. The blockchain platform will also increase the security of documents related to these types of trades and payments by “providing an independent and much safer cloud-hosted record of all documents and steps, instantly available in real time to all parties involved.”
The new platform is also intended to recognize and hold most of the trades that fail in the early stages of the settlement process. These transactions will then be completed in the “Swift gpi network.”
Per de Roos, the network was developed as a “hub and spoke” system: Standard Bank is the hub and its 20 African franchises are spokes that facilitate payments. The banks and its partners will also work closely with the Industrial and Commercial Bank of China (ICBC) with the intention of extending the blockchain platform into China.
Speaking about the relationship between the Standard Bank and IBCB in an article published on the former’s website, executive Leon Barnard states, “Standard Bank and ICBC have purposefully structured their Africa-China trade corridor to meet the needs of both Chinese importers and African exporters …”
South Africa has been experimenting with use cases for blockchain technology for some time. In 2017, the South African Reserve Bank (SARB) announced it would develop a regulatory sandbox where companies could come and test uses cases for blockchain technology without fear of violating existing regulations. In June of last year, SARB released a report outlining its findings from a 14-week experiment with blockchain technology.
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