South Africa is positioning itself at the forefront of blockchain-based payment innovation in Africa through its central bank’s ongoing experimentation with distributed ledger technology. The South African Reserve Bank (SARB) is advancing Project Khokha 2x, focused on wholesale CBDC trials and bank-issued stablecoins for regional payments.
SARB launched the original Project Khokha in 2018 as a proof-of-concept for a DLT-based wholesale payment system. The project successfully demonstrated that blockchain could process the typical daily volume of payments handled by South Africa’s existing real-time gross settlement system, SAMOS.
Project Khokha 2, completed in 2022, explored tokenized money and debentures in a cross-border context. According to the SARB’s official report, participants built applications on the infrastructure through four technical proofs of concept: a cross-border stablecoin, a domestic banking industry stablecoin, a trade finance platform, and an asset tokenization platform.
Current Focus: Project Khokha 2x
The current phase, Project Khokha 2x, is exploring wholesale CBDCs and bank-issued stablecoins specifically for regional payments across Southern African Development Community (SADC) nations. The initiative aims to address inefficiencies in existing regional payment networks by leveraging blockchain’s decentralized and transparent ledger system.
According to SARB fintech expert Gerhard van Deventer, one approved use case involves commercial bank-issued stablecoins for regional value transfer — for example, using one bank in South Africa to settle with a bank in Kenya. The project is also exploring integration with trade finance platforms, where blockchain’s ability to handle multiple parties and documentation provides clear advantages.
Technical Architecture
The Project Khokha 2 infrastructure used two DLT networks: wCBDC Zone for digital currency issuance on a SARB-controlled platform, and Khokha Hub for the issuance and trading of debenture tokens. A bidirectional bridge connected the two platforms, allowing participants to port the CBDC between them.
However, SARB noted in its lengthy report that such porting posed technical risks related to the security and reliability of the bridge
and advocated for adequate technical controls. The project involved South Africa’s largest banks, including FirstRand, Absa, Standard Bank, JSE Limited, and Nedbank.
Retail CBDC Development
In November 2025, SARB published a position paper on the necessity of a retail CBDC, expanding beyond wholesale applications. The bank completed a feasibility study exploring whether a retail CBDC — a digital rand for everyday transactions — would help achieve its policy goals. The study examined design considerations, policy impacts, and appropriate legal and regulatory regimes.
According to SARB Governor Lesetja Kganyago, the aim is to understand which elements of a CBDC would be most beneficial for South Africa, explore various design considerations, understand policy impacts as well as intended and unintended consequences of using CBDC.
Market Context
South Africa’s blockchain push comes amid broader regulatory formalization. As of December 2024, the Financial Sector Conduct Authority (FSCA) had received 420 Crypto Asset Service Provider license applications, approving 248. The country leads Africa with 38% crypto growth in 2024 and ranks third on the continent for blockchain venture capital funding.
Competing regional initiatives like the Pan-African Payment and Settlement System (PAPSS) are also working to modernize cross-border payments, highlighting continent-wide momentum toward reducing transaction costs and settlement times.
Challenges and Timeline
Despite technical proof-of-concept success, SARB’s reports note that further work is required in terms of cost-benefit
analysis. Key hurdles include establishing regulatory frameworks, ensuring cybersecurity, and achieving consensus on technical and governance standards among participating nations.
The bank emphasized these remain exploratory phases, not endorsements of specific technology or cryptocurrency. In its April 2024 Digital Payments Roadmap, SARB set a two-year timeframe for exploring retail CBDC feasibility and wholesale CBDC use cases, suggesting concrete decisions may emerge by 2026.
The Bank for International Settlements has noted the global trend of central banks exploring CBDCs, placing South Africa’s efforts within wider monetary system evolution. For policymakers and fintech developers, SARB’s methodical approach provides a blueprint for central bank-led blockchain innovation in emerging markets.
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