Banking News

Bank of England announces new innovation oriented payments network

bank of england digital pound

Yesterday the Bank of England (BofE) announced that it awarded Accenture the contract for the renewal of its Real Time Gross Settlement (RTGS) system, the critical infrastructure in UK payments that processes £685 billion daily.

A digital pound or central bank digital currency (CBDC) was not mentioned in the announcement, but innovation was. Notably, Accenture is involved in numerous Central Bank Digital Currency (CBDC) experiments with the European Central Bank (ECB), FranceCanadaSingapore and Sweden. It’s also a partner in the private Digital Dollar Initiative. 

Additionally, the consultants worked with SAP to adapt the SAP Payments Engine to enable token-based real time gross settlement to run alongside a primary RTGS system.

The design of the RTGS renewal program has been in the works for several years. Two years ago, the Bank of England worked with startups to ensure any RTGS design could be interoperable with new innovations. This involved multiple blockchain firms, including Clearmatics, the technology provider for the Fnality digital currency network backed by numerous global banks. 

“The Renewal Programme is a key priority not just for the Bank but also the wider UK payments industry,” said Victoria Cleland, Executive Director for Banking, Payments and Innovation at the Bank of England. “The renewed RTGS service will be designed not only to benefit everyone in the country who makes payments, but to keep the UK at the leading edge of payments innovation.”

Both Accenture and the Bank said the aim was to improve interoperability, functionality and risk management of the high-value payment system.

Meanwhile, the Bank was one of the first to start exploring a digital currency and released its digital pound research roadmap five months ago and is holding consultations. It has not yet announced any CBDC decision.