The Intergovernmental Fintech Working Group (IFWG) Innovation Hub has announced the launch of Project Khokha 2 to explore the policy and regulatory implications of innovation in financial markets driven by distributed ledger technology (DLT).
Project Khokha 2 will issue, clear and settle debentures on DLT using tokenised money in a minimum viable product (MVP) to inform policy and regulatory reflections. Industry participants will be able to purchase the debentures with a wholesale central bank-issued digital currency (wCBDC) and a wholesale digital settlement token (wToken).
The wToken can be seen as a privately issued stablecoin used for interbank settlement.
The project will produce a public report highlighting the insights gained on a number of policy and regulatory challenges introduced by such innovation.
This is in line with the IFWG’s objectives to promote responsible innovation and provide regulatory clarity on financial technology (fintech) innovation in support of its members’ mandates, including stable and resilient financial markets.
The following industry participants will join the IFWG on Project Khokha 2: Absa, FirstRand, Investec, the Johannesburg Stock Exchange (JSE Limited), Nedbank, Standard Bank and Strate.
In addition, three firms have been chosen to partner on the project. Accenture will be responsible for developing the wCBDC for Project Khokha 2; Block Markets Africa (BMA) was selected to produce the DLT-based debentures as well as the wToken for the project; and Deloitte will document the insights gained from Project Khokha 2 in a public report.