The Bank of England, which is the central bank of the UK, has recently added (PDF link) another blockchain proof-of-concept (PoC) to its fintech accelerator program, which was launched late last year.
The institution has teamed-up with a few blockchain startups that focus on financial information processing; the one dealing with blockchain data privacy is being conducted in partnership with the company called Chain. It aims to explore the option of maintaining privacy in a distributed ledger.
“The PoC will examine the extent to which [distributed ledger technology] based systems can be configured to enable privacy amongst participants, whilst keeping data on a shared ledger: one of the holy grails of DLT design,” Andrew Hauser, the central bank’s executive director for banking, payments and financial resilience, said about the new trial announcements.
Said pilot reminds us on J.P. Morgan Chase system called “Quorum,” which is designed to toe the line between private and public in the realm of shuffling derivatives and payments. As such, it aims to satisfy regulators who need seamless access to financial goings-on, while at the same time protecting the privacy of parties that don’t wish to reveal their identities nor the details of their transactions to the general public.
In addition to data privacy, the Bank also has a pilot to test the real-time gross settlement (RTGS) system using technology developed by Ripple, as well as an asset exchange pilot involving PwC.
The Bank of England is exploring multiple applications of the blockchain technology, including its use as a basis for a central bank-issued digital currency — an area that is being investigated by other central banks around the world, as well.
Earlier this year, the Bank became a member of the Linux Foundation-backed Hyperledger blockchain project.