The Bank of England (BoE) announced recently that it’s searching for ways in which its real-time gross settlement (RTGS) system can be linked to the distributed Ledger Technology (DLT). The UK central bank had initially expressed its intention of developing a RTGS that is compatible with the latest DLT service last year.
Several project participants including Baton Systems and Token, Clearmatics, and R3 are currently examining the potential innovative settlement systems that are powered by DLT to establish how they interact with cloud-based RTGS system. The BoE believes that the joint efforts from various project partners will give a broader understand of how the functionalities of the Bank can support the financial sector.
Meanwhile, the BoE has also announced its aim to support the emerging technologies and innovative products and services that will enhance the UK’s financial sector. The BoE intends to make the country a global fintech hub in the near future by promoting the clear understanding of the upcoming technologies including the use of blockchain technology.
The BoE has also promised to play a key role in supporting the crypto-asset taskforce that was appointed by the UK government to investigate the risks and benefits of the emerging technologies.
Recently, the BoE Governor Mark Carney stated that though Bitcoin could fail to become a recognized currency, Blockchain Technology has the potential to grow in the near future. Blockchain technology has significantly opened the door to new cryptocurrency futures that could help expand the fintech industry. The four crypto-futures include:
- Federal Reserve to create its own digital currency
- Giant tech firms to issue real digital tokens that can be easily trusted and accepted globally
- Retail giants to accept digital currencies as an option form of payment
- A cryptocurrency future could still come by default even when it’s not supported by the government
According to Christine Lagarde Director of Internation Monetary Fund (IMF), digital currencies could one day give the existing physical currencies a run for their cash if the sector is allowed to grow gradually.