Bank of England and BIS Trials DLT Settlement System
The Bank of England and the Bank for International Payments (BIS) Innovation Hub London Center have successfully tried the inter-institutional payments system, which uses distributed ledger technology. So, the Bank of England will add the project’s results to its real-time gross settlement (RTGS) system.
On April 19, BIS put out a report about the Meridian effort, which is a pilot project that involves working with other people. The 44-page study focused on how well-distributed ledger technology (DLT) helped businesses in Wales and England work together to buy real property.
The synchronization network made it possible for messages to be sent between the synchronization network and the RTGS system using APIs. This provided a common interface that could be easily expanded to include other types of assets, like foreign exchange. If this method was used for more types of assets, it could cut processing times, costs, and risks by a large amount.
The Bank of England and the BIS have been looking into how DLT could be used in banking transactions and payments for a number of years. The people in question have been involved in a number of projects, such as Project Stella, which focused on cross-border funds and came to an end in 2019.
Also, the Bank of England has been working on making its own Real-Time Gross Settlement system, which is set to go live in 2022. The new system will be made with cutting-edge technology and will replace the current system, which has been in use for almost 20 years. Adding Distributed Ledger Technology (DLT) to the newly created Real-Time Gross Settlement (RTGS) system could make it work better and make it safer.
With the help of Distributed Ledger Technology (DLT), which is more widely known as the blockchain, the banking industry could change in a big way. The fact that this system is decentralized and open makes it possible for deals to be safe, quick, and cheap without the need for middlemen. It could speed up the banking system and make it less likely that people will try to cheat or make mistakes.
The completion of Project Meridian is a big step forward in looking into how Distributed Ledger Technology (DLT) can be used to settle financial transactions. By adding more types of assets to the system, the efficiency and safety of financial deals could be greatly improved, which would be good for the whole industry.
Through Project Meridian, the Bank of England and the BIS Innovation Hub London Center have tried out a payments system that is driven by DLT. Through APIs, the coordination network and the RTGS system were able to send and receive information from each other. This feature could be used for more types of goods to cut down on the time, costs, and risks of deals. This is a big step forward in the study of distributed ledger technology for financial deals. It could make future financial transactions more efficient and safer.