BofE says Ripple PoC reinforces desire for DLT compatibility
The Bank of England says that a distributed ledger technology proof-of-concept with Ripple has reinforced its intention to make a new real-time gross settlement (RTGS) platform compatible with DLT usage in the private sector.
Through its new fintech accelerator, the central bank has been working with Ripple to see how DLT can be used to model the synchronised movement of two different currencies across two different ledgers.
The BofE has already decided that DLT is not “sufficiently mature” to support its new core RTGS system, but says that the now completed Ripple PoC “was a useful exercise to develop the Bank’s understanding of synchronisation and possible technical solutions”.
One issue thrown up by the work is that “cross-border payments when applied to wholesale markets present different challenges than when compared with retail and corporate transactions, which the Ripple product is designed to handle. The availability of liquidity is one such challenge, and the PoC allowed the Bank and Ripple to begin exploring these questions.”
Meanwhile, a separate PoC with machine learning and AI outfit Mindbridge Ai proved successful in helping detect anomalies in datasets. A second phase will now look to test the firm’s machine learning capability more fully by running it repeatedly as part of an operational process.
With another two PoCs (with regtech firm Enforcd and software testing outfit Experimentus) also completed, the bank’s Andrew Hauser says: “We have learnt a great deal through these latest Proofs of Concept, both in terms of what FinTech can do, but in also in terms of how it can help us work, think and communicate differently.”