South Africa’s Standard Bank will develop a limited private permission-based distributed ledger platform for foreign exchange (FX) payments and settlement.
The Johannesburg-based bank said its international settlements blockchain hosted on hyperledger fabric is set to go live in the first half of 2019.
The platform is designed to speed up payments and settlement while making transactions more transparent.
The bank said the visible and private permission-based nature of the ecosystem also means that the platform cannot, for example, be used for money laundering.
“In other words, Standard Bank’s foreign exchange payments and settlement blockchain does not operate like a cryptocurrency, accessible to all. Instead, since this is not a public blockchain, “it can’t be used for anything other than legitimate, regulated and entirely transparent transactions involving Standard Bank clients,” says Richard de Roos, Head of Foreign Exchange for Standard Bank Group.
Initially, this private permission-based network will only include Standard Bank and Stanbic Bank partner banks, clients, and third parties directly involved in trades across its 20 market African footprint.
Standard Bank is also working with its major shareholder and global banking partner, the Industrial and Commercial Bank of China (ICBC), enabling Standard Bank to extend this private permission-based ecosystem into China.
“This will ensure a seamless trackable payment experience for all Standard Bank clients – covering the African continent and augmented with Asian interoperability,” says Roos.
Since ICBC is also key to most Standard Bank trades involving Africa and China, and both Standard Bank and ICBC have built their platforms on hyperledger, both banks’ private permission blockchain trade solutions are entirely interoperable.
Moreover, with the whole system being on the cloud, “Standard Bank working together with ICBC means that our private permission blockchain foreign exchange payments and settlement solution provides clients potential access to similar ecosystems around the world,” adds Roos.