After having carried out a Proof of Concept (PoC) with the startup Chain, the Bank of England recently published that it came to the conclusion that a distributed decentralized blockchain technology platform with a degree of privacy for sensitive data seems possible.
According to the official report, the research was conducted with the aim of exploring whether the blockchain technology can maintain the levels of privacy required by the banking system participants, at the same time that the information is distributed among all the participating nodes and that the transactions they can be supervised by the regulatory authorities.
The conclusion they reached responds to a doubt expressed by the bank since they began to investigate the technology in 2016
“It seems theoretically possible to configure a distributed accounting system so that transactions remain private while All the data shared in the network are maintained, and at the same time, a regulatory view of all transactions is maintained,” the bank said.
The testing was carried out with a transfer of ownership of a fictitious asset among several participants, including the central bank and a regulatory body. The activity supported by Chain was carried out for exploration and learning purposes, as published by the bank.
In the test, the issue and withdrawal of assets, as well as the granting of access to the general ledger, was the responsibility of the central authority, while the regulatory authority could have access to supervise all transactions.
Although the answer was “theoretically possible” regarding blockchain technology, security issues still need to be fixed
The report highlights that other aspects of the technology of the distributed ledger still “must be explored further” since the blockchain is not yet competitive to process banking transactions in the speed of processing and the scalability of it. An issue that, for the moment, does not make the adoption of blockchain technology viable as a platform for the processing of all transactions, according to the Bank of England statement.
To understand the importance of this test it is necessary to take into account that the privacy of the data has been one of the main concerns of the banks regarding blockchain. A fact that has led banking corporations to develop private blockchain-based solutions such as the one proposed by the Bank of England.
In addition to this proof of concept based on the use of blockchain technology for the banking sector, last March, the Bank of England announced another proof of concept, this time for the support of its gross settlement system, whose results are expected to be obtained by the end of this 2018.
Jackson Bey was born and raised in Lethbridge Alberta but moved east when he was 22. Apart from running his own consulting firm. Jackson spends his time canoeing the many lakes of Ontario. As a financial journalist Jackson has published stories for CBC Business Online, as well as Buzz Feed and Motherboard. As a contributor to Billionaire 365, Jackson mostly covers markets and trade.