Monday, 22 July 2019

Bank of England eyes saving of 'tens of billions' by using blockchain technology for settlements

The Bank of England is committing to distributed ledger technology to improve the speed and efficiency of the settlements system in the UK

The Bank of England is continuing to explore ways that it can leverage distributed ledger technology for payments, clearing and settlement.

In a speech yesterday, governor Mark Carney said it "could yield significant gains in the accuracy, efficiency and security of such processes, saving tens of billions of pounds of bank capital and significantly improving the resilience of the system."

A distributed ledger - also known as blockchain - is the technology behind cryptocurrencies like Bitcoin. It is essentially an electronic ledger of records which are organised into data batches, called blocks, which automatically reference one another, forming an unbroken chain which theoretically cannot be tampered with as it is 'distributed' and does not reside anywhere central.

The Bank of England views distributed ledger technology as potentially transformational when it comes to clearing processes - which underpin the major UK payments systems like CHAPS, Bacs, Faster Payments and Visa - which are historically inefficient, expensive and susceptible to fraud.

"Securities settlement seems particularly ripe for innovation," said Bank of England governor, Mark Carney, speaking at the inaugural international fintech conference in London yesterday.

"A typical settlement chain involves many intermediaries, making it comparatively slow and keeping operational risks high. Industry has begun to work together to determine how distributed ledger technologies could be used to solve these issues at scale."


source: computerworlduk.com 
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