Bank Of England Partners With Ripple For Synchronized Payments Using Interledger Protocol

The Bank of England has finalized a proof-of-concept with Ripple’s blockchain payments network. The completed initiative explored the synchronized movement of two currencies across two varying simulated real-time gross settlement (RTGS) systems.

Bank of England partners with Ripple

The proof-of-concept uses the Interledger Protocol. RTGS systems play a crucial role in improving national infrastructure, and the system is the backbone of the UK payments industry. RTGS is used to settle hundreds of billions of pounds every working day.

The Bank of England has previously worked on a replacement model that integrates new functionality to synchronize cash transfers made within the RTGS system and the transfer of cash and assets held within other systems.

The bank is also making an effort to analyze the technical options that are currently available. The fintech accelerator at the central bank is working with Ripple to foster high-value cross-border payment systems where transactions executed using two different currencies can be executed simultaneously using two different simulated RTGS systems representing other countries.

Ripple has made a significant effort to create its offerings around the open-source Interledger Protocol. This protocol facilitates payments across ledgers and networks globally. This solution has also integrated Ripple Connect, which serves as an interface that will support the internal systems at the institution in integrating with the network at the firm.

This initiative indicates that payment instructions will be sent and received in a particular manner while the state of payments is determined. The partners have also integrated the ILP Validator network that links payment settlements between transacting ledgers. It also provides clarity on the state of payments.

The Bank of England said it had integrated the solution by Ripple using two simulated RTGS systems available in the cloud. The offering showed that it could process several cross-border payments across the two platforms at the same time. As such, the settlement risk will be lower, and the speed and efficiency of cross-border payments is improved.

Bank of England purses blockchain

The Bank of England is among the central banks globally that are rushing to gain entry into the central bank digital currency (CBDC) sector. China is currently leading the way, with the Chinese digital yuan attracting much investor interest.

The Bank of England is not being left behind, with its pursuit of blockchain technology dating back to 2020. The bank then said it would use Accenture to create a world-class payments service. The bank also noted that Accenture would oversee the RTGS system.

At the time, the bank opined that the RTGS system would serve as a key player in meeting its goal of renewing RTGS. The bank noted that the RTGS system would play a critical role in the future by supporting innovation across the UK.