The Bank of England’s Fintech Accelerator Proof of Concept

The Bank of England (BoE) recently published its Fintech Accelerator Proof of Concept (PoC) titled “Ripple—exploring the synchronised settlement of payments using the Interledger Protocol.”

This draws considerable attention to the blockchain payment company Ripple Labs Inc. and its solutions, highlighting the global recognition of its payment technology’s use cases.

Ripple Interledger Protocol

According to the Bank of England’s PoC, the apex financial institution intends to leverage Ripple’s Interledger Protocol to explore the synchronized movement of two currencies in two simulated Real-Time Gross Settlement (RTGS) systems.

Traditionally, the RTGS serves as a reserve for financial institutions to hold their Pound sterling accounts. The BoE claims this is a safe and immediate route for these entities to exchange payments.

After almost 30 years of leveraging the RTGS system, the BoE recently considered adding new functionality to support ‘synchronisation’ of cash movements made in RTGS. Besides benefits and costs, the BoE considered Ripple’s Interledger Protocol for its ability to enhance cash flow.

Endless Possibilities With the BoE Recognition

BoE’s focus on enhancing cross-border settlement aligns with Ripple Labs’ offerings. This is not BoE’s first consideration of integrating Ripple’s solutions; in 2023, the bank acknowledged Ripple while discussing the U.K.’s future Central Bank Digital Currency (CBDC). This use of Ripple’s Interledger Protocol signals potential collaboration and hints at greater global recognition for Ripple.

The Interledger Protocol has already achieved payment synchronization between two simulated RTGS ledgers, aligning with BoE’s objectives. This achievement and further milestones might attract more attention to Ripple and boost the adoption of its solutions beyond the Interledger Protocol.

Ripple’s Ecosystem Growth

In the past year, Ripple Labs has ventured into innovative niches like tokenization and launched a USD-pegged stablecoin called Ripple USD (RLUSD). It formed a strategic alliance with BDACS for XRP and RLUSD custody services through South Korea’s regulatory framework.

The National Commercial Bank of Saudi Arabia (NCB) also joined RippleNet to further XRP’s institutional adoption, along with several other organizations worldwide. Ripple is working on its tokenization plan on the XRP Ledger (XRPL) and recently unveiled a $3.8 billion tokenized money market fund built on XRPL. Ripple continues to aim for growth in the stablecoin and tokenization sectors.