The Bank of England (BoE) in its quest to modernize the country’s banking system has decided to take steps to adopt Blockchain-compatible systems. The transformation will initially focus on modernizing its Real-Time Gross Settlement System (RTGS) by the year 2020.
The direction by the UK’s central bank is one of the many indications that recently shows that the bank is exploring opportunities in Blockchain in order to leverage cryptocurrencies going forward. On Monday the 23rd of July, 2018, the BoE published a report showing that it is interested in rejuvenating its entire system and it intends to use Blockchain technology to lead this revival. The bank believes that by adopting Distributed Ledger Technology (DLT), it will get to strengthen its system’s defences against cyber-attacks and also get to integrate more businesses onto its system with a futuristic outlook.
An extract from the report says;
“The Bank of England is aiming to revamp the system that underpins British banking and trading in the city of London by 2020 to strengthen defences against cyber-attacks and widen the number of businesses that can use it.”
The BoE’s Real-Time Gross Settlement System handles as much as 500 Billion Pounds of transactions – which comes up to a third of Britain’s GDP. Earlier this year in April, the bank announced that it was going to make a version of the RTGS compatible with Blockchain technology. In taking steps in this light, it announced a “proof of concept” with a number of firms to help make the right changes for the purposes of system-modernization.
The British government is keen on ensuring that the United Kingdom becomes a leader as far as FinTech innovation is concerned, and in a separate but related event, conservative member of parliament (MP) Eddie Hugh recently said that the government needs to focus more on using Blockchain to help foster increased citizen freedoms, improved efficiency and restoring society’s trust in governance.