Our Terms & Conditions | Our Privacy Policy
South Africa’s Nedbank has revealed that it will introduce smart contracts as part of plans to implement its blockchain capabilities. The company said the project will be deployed in the next six to twelve months.
Cobus de Bruyn, head of client value propositions for agriculture at Nedbank Commercial Banking, acknowledged that smart contracts are already being deployed internationally and in South Africa and that agriculture is an early adopter of the technology, one of the drivers behind its success.
“We have the technology available and we’re working around the clock to make this available as soon as possible,” he said.
He pointed out that there are many processes and procedures to follow in agriculture, such as managing finances, accounting and production processes, imports and exports, and interacting with banks and suppliers. Smart contracts are self-executing digital agreements: they automatically execute when set conditions are met.
An advantage of the process is that it streamlines financial transactions by automating processes that traditionally require human intervention. The automation initiative reduces operational expenses, minimises errors, and enhances trust among parties.
Read Also: Nedbank becomes the first African bank to launch services on the metaverse.
Explicitly, a smart contract is a self-executing program that automates the enforcement and execution of an agreement or contract by using blockchain technology to facilitate, verify, and enforce the negotiation or execution of a contract.
Smart contracts can be applied in agriculture to improve efficiency, transparency, and equity in aspects of the agricultural supply chain by automating payments, improving crop insurance, and enhancing food safety.
Cobus de Bruyn, Nedbank’s Head of client value propositions for agriculture
According to De Bruyn, smart contracts and blockchain will be game changers in agriculture for three reasons:
- Import and export involve negotiation and administrative work. These are processes and verifications that are cumbersome and expensive. Through smart contracts, these processes and procedures are automated by shortening the time of the process and making it more secure.
- Smart contracts streamline trade, automate and facilitate payment solutions.
- From a bank’s perspective, smart contracts can expedite and streamline the process of getting credit approval from a commercial bank and receiving the finance.
De Bruyn added that the process involves sending facility letters, giving instructions, and registering securities. It will be automated to reduce turnaround time and administrative tasks typically associated with it.
How Nedbank plans to leverage the smart contract technology
Nedbank aims to fully leverage the opportunities that the smart contract technology presents to eliminate manual processes.
“We are at the next revolution of money, and we can build smart contracts that can give instructions to smart money. Web 3.0, which includes blockchain smart contracts, the metaverse, tokenisation, and more, will replace the existing Web 2.0 as we know it, which hosts the www dot websites that we’re all familiar with,” De Bruyn noted.
With Web3, the commercial bank said its readiness is most important as agricultural clients want faster processes, frictionless, cost-effective solutions that embrace technology.
Considering the technology, Nedbank’s lead architect for information security and blockchain, Adele Jones, expressed that blockchain technology creates a network with memory where everybody in the network has a unique address and, from an audit trail perspective, all interactions on the network are covered automatically with the latest innovations in cryptography.
She further noted that there are two types of configurations of these networks. One is a public blockchain where everyone can join. The other is a permissioned blockchain that provides an enclosed network for specific participants.
“Once the network has been established, every participant in the network has a unique address and can implement a vast and versatile array of transactions,” she said.
According to him, smart contracts are computer codes that can execute on the network ecosystem and automate interactions between participants on the network. This occurs through codifying agreements and improving the traceability of data on the network, where trust, security, and transparency among member organizations are secured.
About Nedbank
Nedbank is a financial services group in South Africa offering wholesale and retail banking services as well as insurance, asset management, and wealth management.
Nedbank Commercial Bank
Nedbank’s primary market is South Africa, while it operates in five other countries in the Southern African Development Community (SADC), through subsidiaries and banks in Eswatini, Lesotho, Mozambique, Namibia, and Zimbabwe, as well as offices in Ghana and Kenya.
Outside Africa, Nedbank provides international financial services in the Isle of Man, Jersey, Guernsey, the United Kingdom, and the United Arab Emirates.
In September 2022, the company became the first African bank to launch services on the metaverse. To achieve this goal, it teamed up with Africarare, the continent’s first metaverse, to purchase a 12×12 hamlet in Ubuntuland for an undisclosed sum.
Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.
Aggregated From –
Comments are closed.