The Bank of England intends to use proof-of-concept (PoC) to understand how the payment processing system RTGS real-time can interact with the technology of distributed registries (DLT).
RTGS is a special payment system, which works in real time, and the transfer of funds is carried out on a “gross basis”. This means that the transaction is confirmed immediately after treatment, without reference to any other transaction. The RTGS system is typically used for transactions of considerable resources, requiring immediate clearing and managed by the Central Bank of the country.
In may 2017 the Bank of England has published a draft of RTGS, arguing that the new service provides “diverse and flexible range of models of computation”, which in turn will provide access to the payment infrastructure for Central Bank money. The Bank then announced its intention to develop a payment service that is compatible with the technology of the blockchain, but in a recent statement the Bank dismissed the idea of switching to DLT fully because of the immaturity of the technology:
Despite the fact that the Bank came to the conclusion that the technology of distributed registries (DLT) had not developed sufficiently to provide a core for the next-generation RTGS, it is a priority to ensure that the new service was able to interact with DLT.
The British Bank will cooperate with companies like Baton Systems, Clearmatics Technologies Ltd, R3 and Token who develop payment solutions using innovative technologies. The participants of the project will study the interoperability of payment systems on the basis of the DLT with the updated service RTGS and identify ways to extend the functionality. The Bank plans to report results of findings at the end of this year.