Page 3 - PROJECT KHOKHA 2

FOREWORD
FOREWORD
The South African Reserve Bank celebrated its 100-year anniversary during 2021 as the technical proof-of-concept (PoC) work for the second phase of Project Khokha (PK2) was being conducted. Experimentation surrounding wholesale central bank money has increased significantly since Project Khokha was launched in 2018.
In addition, industry innovation surrounding the tokenisation of securities and privately issued ‘money’ – for instance, in decentralised finance and stablecoins – have become increasingly topical issues.
PK2 builds on the first iteration of the project which trialled the issuance of a wholesale central bank digital currency, exploring how such tokenised central bank money interacts within a tokenised market to highlight some of the policy and regulatory implications. Tokenisation holds the promise of bringing efficiencies and innovation to financial markets, in part through the ability of distributed ledger technology, to help restructure financial markets by reshaping the infrastructure upon which it is based. The implications must be carefully considered, not least surrounding how such innovation may impact on financial stability and resilience, the impact of new digital governance models and increased cybersecurity risk.
The project was launched in collaboration with the Intergovernmental Fintech Working Group, and a PoC with industry has helped to develop a deep appreciation of the practical considerations in experimenting with innovative projects of this nature. Teamwork remains key to the success of Project Khokha, and appreciation is extended to the industry participants, project partners and everyone who participated and added valuable contribution to the project.
Rashad Cassim Deputy Governor
PROJECT KHOKHA 2 3