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Bank of England Launches Blockchain Payments System

Union Jack flag and Bank of England

The Bank of England (BoE) has been testing a new Proof-of-concept (PoC) system with various firms that utilizes distributed ledger technology (DLT) to improve interactions with external financial institutes.

The system is designed to be used by blockchain-based fintech companies to process transactions on the BoE’s Real-time Gross Settlement service (RTGS). The RTGS is the Bank of England’s proprietary program that handles transactions between banks and other financial institutions and process around £500 billion worth of settlements.

An announcement last month by the bank’s governor, Mark Carney, mentioned the possibility of opening the service to private payment systems such as DLT. Surprisingly, Carney, who is known to be unsupportive of cryptocurrencies, was quoted as saying central bank money will no longer be the “exclusive preserve of banks”.

The new blockchain PoC was trialed in March this year and saw initial involvement from various firms including Baton Systems, R3, and Token, amongst other blockchain companies. It appeared to fair well during all tests and received positive feedback from those involved.

The news indicates a vast improvement in acceptance of blockchain compared to last years Ripple trial by the Bank of England that concluded DLT technology was not ready for use on the RTGS.

A number of banks worldwide have been running successful trials of blockchain technology in their systems lately, with Hong Kong’s central bank instigating a blockchain-based financial system earlier this month.

Image From Shutterstock

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