Bank of England to Use Blockchain Technology for RTGS Payment System

With close to a decade since the invention of Bitcoin’s blockchain, there has certainly been a lot of improvement in the blockchain industry so far. Traditional financial institutions have come a long way, and now appreciate the potential of blockchain as a revolutionary technology.

According to reports, Bank of England is looking to use blockchain technology to rebuild its Real Time Gross Settlement systems (RTGS) so as to integrate a private business interface platform that will accept private payments directly from other payment platforms.

RTGS is a system generally used to transfer large volumes of funds between banks. According to Mark Carney, Bank of England Governor, RTGS system is the backbone of every payment in the U.K. While speaking about the Mansion House in London he said that the bank will conduct an ambitious rebuild of its RTGS system.

Carney also revealed that the apex bank is determined to initiate an “ambitious rebuild” of the platform which he described as the backbone of financial transactions in the United Kingdom.

Carney said,

“The potential returns are large. At present, cross-border payments can cost ten times more than domestic ones. We estimate that in the U.K. alone there is scope to realize annual savings of over GBP 600 million. Most fundamentally, the more seamless are global and domestic payments, the more U.K. households and businesses will benefit from the new global economy,”

The Governor also mentioned that the bank has begun working together with the Bank of Canada, the Monetary Authority of Singapore, and some private-sector organizations to upgrade inter-bank cross-border payments, including initiatives based on DLT.

“Our new, hard infrastructure will be future –proofed to your imaginations, opening up a range of potential innovations in the wholesale markets, and corporate banking and retail services,” 

It’s worthy of note that the bank’s RTGS blockchain initiative has been in the works since 2017 when it first created a proof-of-concept for the system but put the project on hold at the time, as it felt the distributed ledger technology was still not mature enough to be at the core of its RTGS system.

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