The Bank of England has confirmed that the rebuild of its real-time gross settlement (RTGS) platform will be able to interface with systems running distributed ledgers following proof-of-concept trials with four fintech firms.
The central bank is drawing up a blueprint for an overhaul of the UK's Chaps high value payment system to accommodate new market entrants and strengthen its resilience against cyber attacks.
On an average day, Chaps settles around £500 billion between banks - around a quarter of the UK’s annual GDP - processing £76 trillion in central bank money in 2016.
Although the bank has ruled out the creation of a blockchain-based infrastructure, the blueprint calls for a future-proofed interface to distributed ledger technologies in anticipation of their wider use in sterling markets.
In March, the Bank announced that it was running a Proof of Concept (POC) with Baton Systems, Clearmatics Technologies, R3 and Token to understand the different ways a renewed RTGS service could be capable of supporting settlement in systems operating on innovative payment technologies.
In a summary conclusion, the Bank states: "All participants confirmed that the functionality offered by the renewed RTGS service would enable their systems to connect and to achieve settlement in central bank money."
Some limitation were identified, which the Bank says it will address by considering how different account structures could be used and by exploring whether the renewed RTGS service could provide and consume acceptable forms of cryptographic proofs to preserve and protect data.
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