According to Reuters, the Bank of England recently updated its payment system which will now be compatible with blockchain-based and fintech applications. For a considerable period, the central bank has been implementing radical changes to its Real-Time Gross Settlement System (RTGS) to improve its efficiency and comply with the latest technological advancements.
The RTGS forms an integral part of the British economy, handling a whopping $500 billion every year. Upon its completion in 2020, the new RTGS is expected to immune to cyber-attacks and provide access to small and medium-sized enterprises. As a result, businesses will no longer require the central bank to act as an intermediary.
Earlier this year, the Bank of England proposed the use of the ‘proof of concept’ standard in the improvement of RTGS. The bank also asked for the feedback of prominent payment system developers such as R3 and Clearmatics. Precisely, these institutions were asked to assess whether the new cloud-based RTGS infrastructure would integrate seamlessly with blockchain platforms. Furthermore, the bank sought to establish if the functionality of RTGS could be improved by incorporating new technology.
Amazingly, the firms unanimously acknowledged that RTGS can work with distributed ledger technology flawlessly. Consequently, such institutions would be able to connect to the central bank and achieve settlement efficiently. However, there are some measures that need to be deployed to improve the accessibility to the bank’s systems. One particular recommendation proposed the use of cryptographic signatures to eliminate the possibility of data alteration.