With R35 million being traded on South African BitCoin exchanges in the last day – along with new “classes” aimed at getting workers up to speed with the tech – it’s clear that blockchain technology is being taken more seriously by South African professionals.
According to Amit Kaundinya, practice manager at WiPro Limited, the traditional promise of banks has been to act as a middleman – verifying transactions, conducting fund transfers, convert currencies, and more.
This is set to drastically change however, as the blockchain technology acts as a distributed ledger that leverages a series of timestamped records, or blocks, to effectively authenticate a transaction in a secure manner, without third party intervention.
Kaundinya said Banks are cautious about the role of the blockchain when, in fact, banking CIOs can – and should – be embracing the technology to more effectively secure their own transactions, rather than shunning it as a possible replacement for their services,” he said.
What it means for you
These changes are indeed already taking place, according to Farzam Ehsani, blockchain lead at RMB and chair of the South African Financial Blockchain Consortium (SAFBC).
Ehsani and the consortium are currently working with the country’s biggest banks and financial institutions to introduce a sovereign blockchain – Springblock – allowing the competitors to make use of and develop new technologies together.
While the new project promises to go relatively unnoticed by the average banking customer, Ehsani noted that customers will certainly notice a change in their banking fees.
He also noted that “any forward-looking financial institution” is exploring incorporating cryptocurrencies and their innovations into their systems, as well as looking at using blockchain to improve insurance, share-trading and other financial products.
“Few appreciate how transformative blockchain technology is to the world,” he said. “20 years ago, most banks didn’t have any online presence – today, that’s unthinkable. Times change quickly.”
Despite the mass excitement surrounding blockchain and cryptocurrencies, Ehsani said it was impossible to say when exactly South African consumers could expect improvements such as lower bank fees.
Part of this delay is because of the steep challenges the new technology currently faces. According to Ehsani, more than any political or financial regulations, education is the biggest sticking point in blockchain’s mass adoption.