The Bank of England (BoE) has announced that it is commencing a proof-of-concept (PoC) to look into the way in which its renewed Real Time Gross Settlement (RTGS) service could be compatible with innovative payment technologies, including built on distributed ledger technology (DLT).

The BoE last year stated that its renewed RTGS service will offer a diverse and flexible range of settlement models, to enable existing and emerging payment infrastructures to access central bank money. The bank has now set out its vision for the renewed service that will deliver a substantially stronger, more resilient, flexible and innovative sterling settlement system for the country.

While the central bank in its investigations of DLT last year found that the technology is not yet sufficiently mature, it said that it places “high priority” on ensuring that the new service is capable of interfacing with DLT.

For the PoC, the central bank is collaborating with a number firms engaged in the development of payment solutions using innovative technologies. These include Baton Systems, Clearmatics Technologies Ltd, R3, and Token.

“Participants in the PoC have access to a cloud-based system developed by the Bank which replicates a version of the prefunded net settlement arrangement a renewed RTGS service will offer to the major UK retail payment systems. The PoC is exploring whether innovative settlement systems are able to interface with that functionality and identifying ways in which the renewed RTGS service functionality could be expanded,” the BoE said.

The central bank said that it expects to publish a summary of findings from the PoC later in the year.