The Bank of England (BoE) is testing a blockchain system that will affect the processing of payments. As it became known, the central Bank of England intended to apply the distributed ledger technology (DLT) to the real-time gross settlement (RTGS) mechanism. All this is done to find out how new technologies may extend the functionality of the service.
RTGS (Real-time gross settlement) are specialized transfer systems in which the transfer of money or securities from one bank to another is carried out in real time on a gross basis. Real-time transfer means that the payment transaction is confirmed immediately after its processing.
In May 2017, the central bank introduced the RTGS project, having argued that the new service would provide "a diverse and flexible range of settlement models." Then the bank announced its intention to develop a payment service compatible with the Blockchain technology. However, BoE does not intend to move completely to DLT but will try to combine these two systems.
"Although the Bank has concluded that Distributed Ledger Technology (DLT) is not yet mature enough to provide the core for the next generation of RTGS, it's a high priority on ensuring that DLT as and when it is developed in the wider sterling markets," – BoE stated.
The central bank will cooperate with such companies as Baton Systems, Clearmatics Technologies Ltd, R3, and Token. BoE promises to report the results of this experiment at the end of this year.