The Bank of England and Bank for International Settlements (BIS) have completed a joint pilot testing a distributed ledger technology-based settlements system between institutions.<\/p>\n
The UK central bank plans to take lessons from the project and apply them to its real-time gross settlement (RTGS) system.<\/p>\n
BIS has also published a 44-page report<\/a> onproject. Titled Project Meridian, it was carried out<\/a> with the Bank of England at the BIS innovation hub in London.<\/p>\n The document says the banks were able to buy houses in England and Wales via a synchronization network that utilizes distributed ledger technology (DLT).<\/p>\n According to the report, the method of sending messages between the synchronization network and RTGS system could be extended to other asset classes \u201crelatively easily\u201d.<\/p>\n The report is also clear that this settlement system could benefit central bank digital currencies (CBDCs), stating that:<\/p>\n \u201cSynchronization can provide a central catalyst for innovation in wholesale payments and support the emergence of new payments infrastructures that settle using bank money.\u201d<\/p>\n Project Meridian does outline a number of potential issues in using such a system, however. The document specifies the difficulties network operators would face in implementing identity verification.<\/p>\n It also highlights that synchronization services would only be available during RTGS service hours.<\/p>\n There is also a host of legal issues, such as where the final point of irrevocability of the settlement would be drawn and how to digitally represent asset ownership.<\/p>\n In March this year, the BIS announced it had completed Project Icebreaker, another pilot looking at international retail and remittance use cases for CBDCs.<\/p>\n The project saw participation from the central banks of Norway, Sweden, and Israel.<\/p>\n![\"Blockchain](\"https:\/\/blockchaintechnology-news.com\/wp-content\/uploads\/sites\/10\/2022\/04\/blockchain-expo-world-728-x-90-01.png\")