FLASHBACK: The Bank of England Confirmed Ripple Proof of Concept!

September 2, 2022 11:25 pm

Let’s look back in time, shall we?

A paper published by the bank of England revealed that the XRP protocol was tested by UK officials and was found to be satisfactory for crossover payment operations.

Ripple’s Interledger protocol, which is intended to allow transactions across various distributed ledger systems, was used in one of the multiple fintech proofs-of-concept that were unveiled by the UK central bank in 2017

The trial focused on a cross-border payment scenario in which “two different currencies” were “launched simultaneously in two different simulated real-time gross settlement systems.”

The Bank of England added these details:

The Ripple solution utilised by the Bank was built around the open source Interledger Protocol that enables
payments to be made across different ledgers and networks across the world. A ledger is essentially a file
used to record transactions measured in terms of a monetary unit of account. The solution used Ripple
Connect, which acted as the interface that enables an institution’s internal systems to integrate with the
Ripple network.

This means that payment instructions can be sent and received, and the state of payments
can be queried. The solution also utilized the ILP Validator network which coordinates the settlement of
payments between the transacting ledgers, and is the source of truth regarding the success or failure of such
payments.

We successfully integrated the Ripple solution with two simulated RTGS systems, hosted in the cloud, and
demonstrated that we could process a successful cross-border payment across two RTGS systems
simultaneously. We also demonstrated that an attempted cross-border payment that failed validation on the
receiving side would not be honoured.

American Banker got the scoop too:

Technologists who have argued that distributed ledgers are the future of cross-border payments got a win on Monday from a surprising source: the Bank of England.

Using technology developed by Ripple, the central bank’s fintech accelerator successfully showed that a high-value cross-border payment involving two different currencies could be processed across two separate systems simultaneously, it said Monday. Each system was meant to represent a sovereign country.

The proof of concept relied on Ripple’s enterprise software, which dozens of banks, including Santander, Royal Bank of Canada and Mitsubishi UFJ Financial Group, are commercially deploying as a way to do cheap, fast payments. Another essential piece was Ripple’s Interledger Protocol, which allows payments to be settled across distinct ledgers.

 

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