Paper ledgers are long gone at the Bank of England. But in their place lies the Real Time Gross Settlement system (RTGS), across which all payments between banks are settled (£500 billion every day). Minouche Shafik, Deputy Governor, Markets & Banking noted that as part of a technology refresh of RTGS, the BoE will explore the Distributed Ledger as a potential solution.
“The emergence of various forms of Distributed Ledger Technology (DLT) poses much more profound challenges because it enables verification of payments to be decentralised, removing the need for a trusted third party,” she said. “It may reshape the mechanisms for making secured payments: instead of settlement occurring across the books of a single central authority (such as a central bank, clearing house or custodian), strong cryptographic and verification algorithms allow everyone in a DLT network to have a copy of the ledger, and give distributed authority for managing and updating that ledger to a much wider group of agents. The Bank is undertaking work to understand the implications of new digital or e-monies and new methods of payments and financial intermediation as part of the One Bank Research initiative.”