Bank of England revamps RTGS system with the help of Decentralised Technology
The Bank of England is in the midst of executing a total overhaul of its interbank payment system through the introduction of a new blockchain-based platform. They have also confirmed that the network will soon be available for fintech firms and businesses that are involved in processing transactions on a blockchain network.
In August, the central bank of the UK published a report that detailed its recent work establishing a PoC with a number of firms that are operating within the blockchain or DLT space. The idea behind the trial was to explore the feasibility of connecting blockchain businesses with a version of the banks RTGS service.
The Real-Time Gross Settlement service handles approximately GBP 500 billion through the facilitation of settlements between various financial institutions. Mark Carney, the Governor of the BoA announced that one of the core features of the new RTGS would be opening it to private payment systems including DLT companies.
Mr Carney who has been vocal in his criticism of cryptocurrency in the past stated that the bank “No longer access to central bank money be the exclusive preserve of banks.”
The PoC which was finalised in March of this year included collaborative efforts from Baton Systems, R2, Token, and Clearmatics Technologies. The report on the findings of the trial includes the expressed confidence from participants that they would connect to the RTGS in order to settle transactions that are denominated in central bank currency.
“All participants confirmed that the functionality offered by the renewed RTGS service would enable their systems to connect and to achieve a settlement in central bank money,” the BoE said in its statement, adding that officials will also investigate “whether the renewed RTGS service could provide and consume acceptable forms of cryptographic proofs.”
The impending departure of the UK from the European Union has resulted in many British companies and institutions making significant efforts to attract fintech and digital businesses to the country.