The Bank of England is undertaking a complete overhaul of its interbank payment system and will open the network to fintech firms that process transactions via the blockchain network.
The Central Bank of England on Monday published a report assessing its intention to use proof-of-concept (PoC) to understand how RTGS's real-time payment processing system could interact with distributed ledger technology (DLT).
RTGS is a dedicated payment system that facilitates settlements between financial institutions, processing transactions worth around £500 billion, representing a quarter of the UK's total GDP.
Bank of England Governor Mark Carneyannounced last month that the main goal of an "ambitious transformation" of the RTGS service was to open it up to private payment systems and DLT companies. “Access to Central Bank money will now be open to more than just banks,” said Carney, who is known to be skeptical of cryptocurrencies.
The study, conducted in March, included DLT startups Baton Systems, Clearmatics Technologies, R3 and Token.
“All participants confirmed that the functionality offered by the updated RTGS service will enable their systems to connect and settle in central bank currency,” the Bank of England said in a statement. In addition, officials are also examining whether the revamped RTGS service can provide and accept acceptable forms of cryptographic evidence.
Last year, the Bank of England began testing an interregister system designed to synchronize payments between central banks with US start-up Ripple, although Bank of England officials concluded at the time that blockchain technology was "not mature enough" to be able to provide DLT companies with an RTGS service.
However, the UK withdrew from the European Union has prompted the country and its institutions to pay increased attention to attracting fintech firms to the country. The bank hopes that the new RTGS system will be implemented by 2020.
According to ccn.com
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