South Africa's Central Bank Launched a FinTech Programm

The South African Reserve Bank has launched a financial technology program that will trial JPMorgan's Quorum blockchain potential in interbank clearing and settlement  
14 February 2018   124

According to the official media statement dated February 13, the main goal of the programme is to track and analyse FinTech developments in order to assist an appropriate policy framework and regulatory regime in formulating frameworks.  

It is also indicated that the South African Reserve Bank (SARB) established a program in order to launch Project Khokha which will experiment with distributed ledger technologies (DLTs). It will prioritize a project to explore a proof-of-concept (PoC) using the tech.

The SARB announced its technology partner, ConsenSys, a world-leading expert on Quorum. It will assist the SARB in the design, setup of infrastructure and running of the POC. The project will involve replicating the wholesale payment process on Quorum, the enterprise blockchain co-developed by JPMorgan and ethereum startup EthLab.

According to the SARB’ statement, the aim of this project is to gain a practical understanding of DLTs through the development of a proof of concept (PoC) in collaboration with the banking industry.

The SARB will release a public report explain all the findings, risks and benefits of the associated project during the second quarter of 2018. 

German Financial Regulator Clarifies Stance on ICOs

The Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) has clarified its position on ICOs
22 February 2018   36

German financial regulator admitted it was receiving many inquiries about the status of tokens and cryptocurrencies. According to an advisory letter, BaFin provides some basic definitions of ICOs and related terms. It is important because the results of a new survey showed that more than two-thirds of Germans know about bitcoin.

In this letter, BaFin educates the public and explains how tokens are typically generated, how blockchain works and that ICOs are used to raise funds for startup projects. The note states that for regulatory purposes, ICOs, tokens, coins, and cryptocurrencies are subject to the existing provisions in the field of securities supervision and other relevant national and EU laws.

The authority advises participants in ICOs to check and follow rules applicable to regulated financial instruments, such as securities. If businesses or individuals have any doubts about regulations, they should approach BaFin.

According to BaFin, companies should fulfill any obligations under the Banking Act and the Capital Investment Code, the Insurance Supervision Act and the Payment Services Supervision Act. The transactions may be prohibited if relevant regulatory requirements are not met.

The authority also states that legal classification of tokens requires precise examination. It will determine their status on a case-by-case basis after studying their features. The token should be transferable and tradable on cryptocurrency trading platforms in order to be classified as a security.