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Concluding thoughts on the proof-of-concept
Reflecting on the primary opportunities, the team set
out to explore in the PoC, DLT and the TTP enabled opportunities for innovation. For instance, the use of tokenisation enabled the team to create a fungible
token which enabled trade in fractions of debentures thereby increasing liquidity in the secondary market. The exploration of interoperability between the Khokha Hub and other networks, such as the wCBDC Zone, in turn led to further exploration with the industry participants on the project, on how their DLT-based networks interact with the TTP and potentially even public networks. Exploring trading, clearing and settlement of debentures on DLT resulted in some benefits.
The use of a single shared ledger with different levels of access, depending on the role of the participant, enabled greater oversight of what was happening across the network, making reconciliations easier and providing FMD very useful real-time operational data. Having both the security and settlement tokens on DLT enabled DvP on a single network; however, the porting of the central bank’s settlement token across two platforms also introduced some challenges, for instance, in the separation between operational and legal settlement introduced by porting the wCBDC token to the Khokha Hub. Although the use of DLT may result in reducing certain costs and reducing barriers to entry, for instance, through fractionalising debenture tokens in the secondary market, the overall cost-benefit analysis is complex as trading in tokens will most likely happen in parallel to existing markets and would require further work in the future. Some of the above points and questions asked in the PoC, such as the potential impact on FMIs, are discussed further in the next section of the report (i.e. section 5) on the implications identified from the PoC.
THE PROOF-OF-CONCEPT
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