The Bank of England is going through a complete overhaul of its interbank payment system, which should be completed by 2020. The bank’s representatives announced that the network will be opened to fintech companies with blockchain transactions. One of the reasons behind this decision may be connected to Brexit; the UK is doing a lot to attract fintech companies to the country.
The central bank issued a report where its recent PoC with firms operating in the DLT (distributed ledger technology) space was evaluated. The goal was to examine the feasibility of connecting blockchain companies to a new version of the bank’s RTGS - Real-Time Gross Settlement - service. The RTGC manages settlements between financial institutions. The most ambitious aspect of RTGC reform is to open it to private payment systems, including DLT.
The aforementioned PoC featured such DLT startups as Baton Systems, Clearmatics Technologies, R3, and Token. Bank of England officials have said “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”. The statement adds that further tests will be conducted to establish “whether the renewed RTGS service could provide and consume acceptable forms of cryptographic proof.”