UK Payments System May Soon Be Blockchain Compatible

UK Payments System May Soon Be Blockchain Compatible

The governor of the Bank of England, the UK`s central bank, has reportedly said that an upcoming version of the UK`s main interbank payments system wi

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The governor of the Bank of England, the UK`s central bank, has reportedly said that an upcoming version of the UK`s main interbank payments system will be compatible for Blockchain settlements.

Bank of England`s governor Mark Carney spoke at this year`s International FinTech conference in London. According to the official, the central bank works on its own proof-of-concept ledger.

Last year, the bank released a document focused on exploring the next generation of its Real-Time Gross Settlements (RTGS) service.

“First, the new RTGS service must be capable of responding to the changing structure of the financial system. Pressure on traditional business models, combined with the opportunities presented by new technology, have encouraged a progressive unbundling of financial service provision, leading to the emergence of a range of new competitors to traditional providers of payment and settlement services”, as stated on page 4 of the report (http://www.bankofengland.co.uk/markets/Documents/paymentsystem/cp160916.pdf).

Carney also underlined the potential of distributed ledger technology, or blockchain technology. He said:

“New technologies could transform wholesale payments, clearing and settlement. In particular, distributed ledger technology could yield significant gains in the accuracy, efficiency and security of such processes, saving tens of billions of pounds of bank capital and significantly improving the resilience of the system.”

The Bank of England joined the Linux-foundation and the open-source Hyperledger blockchain initiative earlier this year.

“We’re now at 122 members and seeing even more diverse organizations across industry sectors invest their energy and resources in understanding how blockchain technology can strengthen their own business processes.”, commented Hyperledger director Brian Behlendorf.

“We are a member of Hyperledger along with private market participants and tech firms. And we will make our next generation RTGS compatible with settlement in a distributed ledger.”, added Carney who is going to be governor of the bank until 2019.

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