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South Africa's Central Bank Claims Success in Blockchain Payment Trial

South Africa’s central bank has announced some pretty astonishing results for a trial of its blockchain-based system for interbank clearance and settlement.

According to a statement released Tuesday, the South Africa Reserve Bank (SARB) said it has completed a 14-week “realistic” proof-of-concept that managed to settle the country’s typical 70,000 daily payment transactions within two hours, taking an average of 1–2 seconds to generate each block – and all while preserving full anonymity.

Based on a detailed report published by the SARB on Tuesday, the pilot saw participation from members of a consortium of banks, including Absa, Capitec, Discovery Bank, FirstRand, Investec, Nedbank and Standard Bank.

Before you get too excited, SARB stated in the report that the success of its proof-of-concept doesn’t mean it plans to replace the existing real-time gross settlement (RTGS) system with a live blockchain implementation. For that, more study is needed, the central bank said, and relevant regulatory and compliance systems would need to be in place.

The bank said in the report:

“Key considerations that need to be addressed include the evaluation of supporting frameworks and other systems that integrate with the RTGS system, as well as the legal, regulatory and compliance factors. … A fully live DLT-based payments system is not currently planned in South Africa.”

As previously reported by CoinDesk, SARB first announced the trial of the project, dubbed Khokha, in February, in partnership with ethereum startup ConsenSys. The payment platform is built on top of Quorum, the enterprise blockchain platform developed by investment bank JPMorgan.

South African rand via Shutterstock

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CBOE CEO Blasts 'Uncalled For' Bitcoin Futures Critiques

CBOE’s chief executive is pushing back at suggestions that the exchange’s newly-launched bitcoin futures market was hastily done.

Speaking to Financial News, Edward Tilly said that objections like those raised by the Futures Industry Association in an open letter last week are “uncalled for” and doesn’t reflect the reality of the regulatory approval process. As an institution that trades commodity-backed derivatives, the CBOE is overseen by the Commodity Futures Trading Commission (CFTC),

He told the publication:

“I think letters like that and cheap shots to our regulator, the CFTC, are uncalled for to make it seem this was an overnight self-certification without the proper amount of CFTC involvement. This is just irresponsible. I respect all the concerns that the industry has but when it’s articulated in the way the FIA did, not so much.”

In that letter, released last week, FIA chief executive Walt Lukken said that members are concerned about the volatility around cryptocurrency prices, while also attacking the process that led to the yesterday’s futures launch.

“A public discussion should have been had on whether a separate guarantee fund for this product was appropriate or whether exchanges put additional capital in front of the clearing member guarantee fund,” Lukken wrote at the time.

Similar objections were previously raised by Interactive Brokers founder Thomas Peterffy who, in an ad in the Wall Street Journal, argued that bitcoin derivatives activity should be siloed off from the broader market.

Tilly explained that the Options Clearing Corporation (OCC), a clearinghouse focused on equities derivatives, clears the contracts for CBOE.

“Again, I default to their expertise and I’m comfortable with their decision,” he told the publication.

Clear window via Shutterstock.

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Nasdaq Awarded Patent for Blockchain Data Matching System

The U.S. Patent and Trademark Office has awarded exchange operator Nasdaq a patent for a proposed blockchain-based data matching system.

First filed in February, the patent describes a data transfer and logging system, with a blockchain used to track trades and clearing positions. The patent application was originally published in August and names Sweden-based Johan Toll and Fredrik Sjöblom as the inventors.

According to the text of the patent, transactions within the system occur through a two-step process. Each transaction gets logged in two blocks: one that records the transaction as it comes from the source to the intermediary, and a second as it passes through that intermediary to its destination.

The benefit of the system, the patent’s authors state, is that blockchain could serve as a way to boost efficiency in clearing house processes.

“It would thus be desirable to improve the speed and efficiency by which clearing and settlement, or both clearing and settlement processes may be performed in a computerized environment. Accordingly, it will be appreciated that new and improved techniques, systems, and processes in this area of technology are continually sought after,” they write.

Nasdaq has filed multiple intellectual property applications relating to blockchain, including a proposed way to back up a blockchain-based exchange system. Indeed, the rate of patent applications related to the tech generally has grown significantly in the past year.

Nasdaq image via Roland Magnusson/Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.