change aims to provide several improvements. In addition to making the RTGS
system compatible with blockchain-based payment systems as part of an effort to
“future-proof” the bank’s operations, the overhaul will also enable less costly
cross-border payments (in part by using settlement methods based on distributed
ledgers) and richer data collection from payment settlements, Carney said.
Who’s Afraid of Blockchain Technology?
Carney avoided using the word “blockchain”
during his speech. But it seems clear that he had blockchain-based payment
systems in mind when he spoke of rebuilding the bank’s payment settlement
infrastructure to support “new private payment systems, including those using
may also have been referring to the new finance sector when he said that “the
economy is reorganising into a series of distributed peer-to-peer connections
across powerful networks — revolutionising how people consume, work and
communicate,” per a transcript of the speech.
also sounded a lot like an advocate for cryptocurrency (though that term was
also noticeably absent from the speech) when he promised that, thanks to the
RTGS overhaul, “no longer will access to central bank money be the exclusive
preserve of banks."
fans tend to be keen on the mantra that innovations like Bitcoin allow you to “be your own bank,” instead of relying on third-party financial institutions.
seem, then, that the Bank of England wants to embrace new finance solutions
that leverage blockchain technology, even though it remains wary of endorsing
the language and terminology of the mainstream blockchain economy.
keenness to steer clear of words like “blockchain”
and “cryptocurrency” may also
signal plans to embrace private or permissioned distributed ledgers, rather
than well-known public blockchains, as the basis for the bank’s new settlement
said, Carney’s statements also seemed to suggest an openness to supporting a
wide range of payment processes that integrate blockchain technology, so
companies may enjoy the ability to develop new solutions of their own, as long
as they conform with the RTGS system that the bank unveils.
revealed no technical details about how the Bank of England would support
payment processing via distributed ledgers. While he said that the bank is
currently working with the Bank of Canada, the Monetary Authority of Singapore
and private companies “to improve inter-bank cross-border payments, including
initiatives based on distributed ledger,” he offered no details about how those
initiatives work and whether they incorporate any public blockchain technology.
tell, then, how significant the Bank of England’s turn toward distributed
ledgers actually is. But given that the bank, at 323 years old, is one of the
longest established and most influential financial institutions in the world,
any type of positive energy that it directs in blockchain technology’s
direction can only help the world of new finance grow.