03 August 2023
Written By FinTech Alliance
The Bank of England has completed a proof-of-concept with Ripple exploring the synchronised movement of two different currencies in two different simulated real-time gross settlement (RTGS) systems using the Interledger Protocol.
In brief:
-RTGS is a critical piece of national infrastructure and the backbone of UK payments, settling hundreds of billions of pounds each working day.
-The BofE has spent several years working on a replacement that would add new functionality to support the ‘synchronisation’ of cash movements made in RTGS with the movement of cash and assets held in other systems.
-The Ripple effort is built around the open source Interledger Protocol that enables payments to be made across different ledgers and networks across the world.
What does this mean?
The BofE says it integrated the Ripple solution with two simulated RTGS systems, hosted in the cloud, and demonstrated that it could process a successful cross-border payment across the two simultaneously. This, it says, could help lower settlement risk and improve the speed and efficiency of cross-border payments.
