Bank of England Makes Crucial Blockchain Programmability Pivot

The Bank of England has taken a critical step toward integrating blockchain. According to an update shared by the CEO of Quant Network, Gilbert Verdian, the bank has invited Quant to testrun an idea inside a sandbox operated by the financial institution. The goal is to test a treasury automation idea involving atomic multibank cash movement.

Quant proposes multibank treasury automation model

Notably, the goal of this "test" is to enable the Bank of England to perform synchronization for its future upgrades to the U.K.’s real-time payment system (RTGS). The bank’s synchronization lab serves as a simulation environment with no real money, production system or policy decision.

However, the move signals the bank’s preparedness for possible future integrations. The Bank of England is exploring this because the current structure is fragmented across systems, and atomic settlement reduces the risks associated with it.

Verdian stated that the Quant Network is proposing to test a way for big companies that use multiple banks to move money between those banks all at once.

The current structural arrangement is that a company sends payment to one entity, waits and sends to another entity, waiting for these to go through. It is likely that out of all the payments, one or two might fail. Verdian terms this "partial settlement" risk.

However, Verdian says Quant is looking to eliminate this partial settlement risk across multiple banks in a single action. That is, all transfers are initiated as a single action, and everything settles together or not at all.

He says that, to achieve this, Quant will leverage its automation platform to simulate multiple banks reserving funds and commit all transfers simultaneously. Once it is concluded, Quant will update the treasury records.

The aim is to reduce operational risk, liquidity buffers and automate treasury workflows. It will also remove the complexities involved in reconciliation, which is a real problem in corporate banking systems like the Bank of England.

BoE moves from CBDC to infrastructure modernization

Like other protocols such as the XRP Ledger, the development highlights Quant Network’s role in enabling atomic settlement for multibank treasury operations. When adopted, it should guarantee faster payments without disrupting existing market infrastructures.

Interestingly, about this time exactly a year ago, the governor of the Bank of England, Andrew Bailey, was exploring other possibilities. Bailey was looking at creating a central bank digital currency (CBDC) and called for high regulatory standards for stablecoins.

It would appear that the financial institution is keen on embracing digital assets and the enabling infrastructure to drive better services for its users.