Standard Bank, one of South Africa’s largest providers of financial services to private and business customers, has developed a private and permissioned blockchain payment system that promises to reduce problems related to economic trade and foreign exchange.
The blockchain service is built on the open-source and extremely reliable hyperledger fabric framework, a Linux Foundation collaboration that supports multiple industries including banking, IoT and supply chain management.
Standard Banks implementation of the technology is planned for launch in the third or fourth quarter of 2019 and will also cover Standard Bank’s Stanbic partners throughout Africa. The system has been developed in conjunction with the Industrial and Commercial Bank of China (ICBC) and will help to solidify economic ties between the two countries.
Standard Bank’s forex trading app, Shyft, will also be integrated into the blockchain payment system in order to facilitate cross-border payments. Richard de Roos, head of Foreign Exchange at Standard Bank, explained the system has been designed in a hub-and-spoke basis, with Standard Bank and its franchises at the center. Swift, Shyft and the other various payment channels represent the spokes and connect the entire system via ICBC to Asia.
If all goes to plan, Standard Bank expects the system to dramatically reduce the failures related to payment processing and international remittance.
“We could actually offer clients a fully integrated end-to-end blockchain solution that would dramatically reduce the incidence of trade failure while also increasing regulatory transparency and improving the visibility of liquidity,” said de Roos.
Initially, the system will simply collect trades that fail within the first mile of settlement and complete the transactions via the Swift GPI network. It will also create an easily accessible, transparent cloud-based record of all transactions while speeding up the process and improving security.