The Bank of England has updated its payment system using distributed ledger technology in order to boost the development of blockchain in Britain.
In a recent announcement, BoEs is aiming to modernize its Real-Time Gross Settlement system (RTGS) which is necessary for banking and trading in Britain. It also manages the transaction worth of £500 billion yearly, or handle a third of the country’s economic output. However, the updated system is to be launched in 2020 with challenging to cyber-attacks. Therefore it can also be widely available to all small business.
The report reads;
“The BoE is aiming to revamp the system that underpins British banking and trading in London by 2020. It is to strengthen defenses against cyber-attacks and widen the number of businesses that can use it”.
In earlier March, the BoE declared a ‘proof of concept’ with several firms including the changes that needed in payments systems. However, it is that the firms use blockchain technology to record the crypto transactions. Additionally, they were investigating, whether or not the ‘renewed’ cloud-based RTGS service would be able to interact with the system’s DLT and its functionalities..
The BoE said;
“All participants confirmed that all functionality offered by the renewed RTGS service. And it would enable their systems to connect and to achieve settlement in central bank money. A number of recommendations were received to ensure optimal access to central bank money”.
Further, the recommendation will be to investigate if the revamped RTGS system could provide and use “cryptographic proofs” that prevents illegal activities.
Moreover, Britain’s government is more enthusiastic for UK as it is the pioneering centre for fintech innovation like blockchain tech and crypto payments.
Recently, Bank of England’s governor, Mark Carney, echoed his earlier statement that cryptocurrencies are not a risk to the global financial state at the present times. This is because their value is small and they are not largely connecting to the financial systems.
Image Source: Bank of England