A group of South African banks have pushed ahead with plans to test blockchain applications in a partnership that has drawn support from key regulators in the country.

As reported by local outlets IT Web and MoneyWeb, the project included teams from Standard Chartered, Absa, Rand Merchant Bank, Investec and Nedbank. Supporters of the initiative included the Financial Services Board, a major finance regulator; Strate, the country’s central securities depository; and the South African Reserve Bank.

The institutions involved developed and tested a system for issuing syndicated loans via blockchain. According to MoneyWeb, the trial involved the South African central bank circulating a smart contract to other parties on the test network.

The collaboration between South African banks and financial regulators grew out of efforts that began in earnest earlier this year, when as many as 60 representatives from South African banks started collaborating on applications. It was around that time that Absa announced that it was joining the R3 blockchain consortium.

According to those involved, the efforts are early but promising.

Farzam Ehsani, who manages Rand Merchant Bank’s internal blockchain efforts, told MoneyWeb:

Arif Ismail of the South African Reserve Bank told IT Web that regulators need to pursue close-up involvement in an environment of rapid technological change.

"Everyone wants to get their hands on what's going on with blockchains and distributed ledgers. And some of the concepts are not that simple. So, from a regulator's perspective, it's imperative that we keep close to what's going on."

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