BoE’s Payment Network To Be Opened To DLT Based Private Systems
The Bank of England has decided to upgrade its settlement system to suit the changing financial landscape. Despite being bearish on Bitcoin, the central bank has decided to allow blockchain and other distributed ledger based private payment systems to interact with its settlement platform.
While giving a speech, Mark Carney, Bank of England Governor, revealed that the Central bank will go forward with its ambitious plans of rebuilding the Real-Time Gross Settlement System (RTGS), which serves as the base for all the existing payment systems in the UK.
The planned RTGS system will allow private payment platforms to connect and interact directly with the Central bank’s settlement platform. This will be true even for cross-border payments. In particular, Carney stated that all distributed ledger technology (DLT) and blockchain based payment platforms, recognized by the Central bank, will be able to connect to the bank’s network.
“RTGS is being re-built so that new private payment systems, including those using distributed ledger, can simply plug into our system. Our new, hard infrastructure will be future-proofed to your imaginations, opening up a range of potential innovations in wholesale markets, and corporate banking and retail services. No longer will access to central bank money be the exclusive preserve of banks.”
Notably, the Bank of England partnered with Ripple last year to test an inter-ledger system for transactions between central banks. At that time, the Bank of England concluded that the DLT was not mature enough to support RTGS. The test did not involve Ripple’s native token XRP.
Despite showing openness towards blockchain and DLT, Mike Carney has been hostile to Bitcoin. Earlier this year, Carney had stated that Bitcoin is failing as a currency and should be hit with more regulations.
While speaking at the Scottish Economics Conference in March, Carney took a dig at cryptocurrencies. He said
“The long, charitable answer is that cryptocurrencies act as money, at best, only for some people and to a limited extent, and even then only in parallel with the traditional currencies of the users. The short answer is they are failing.”