See for instance the Bank of Canada’s Project Jasper (http://www.bankofcanada.ca/research/digital-currencies-and-fintech/fintechexperiments-and-projects/), the Monetary Authority of Singapore’s Project Ubin (http://www.mas.gov.sg/Singapore-FinancialCentre/Smart-Financial-Centre/Project-Ubin.aspx) and the European Central Bank and Bank of Japan’s Project Stella (http://www.boj.or.jp/en/announcements/release_2017/rel170906a.htm/). 10  6  All speeches are available online at www.bankofengland.co.uk/speeches  6  DLT-based systems may well reach critical mass in the private sector rather sooner however – and many firms and consortia have projects underway in this field. We want to ensure that the next generation of RTGS is able to support such systems, as and when they achieve sufficient market reach. With that in mind, our second DLT PoC explored the potential to use a DLT system, developed by Ripple using the open source Interledger protocol, to link two simulated but otherwise standard RTGS systems, built in the cloud, to enable cross-border payments to settle in central bank money simultaneously: a long-standing policy goal of central banks. This PoC was particularly helpful in identifying some of the operational and technical challenges of such synchronisation. Our most recent DLT PoC, which we are announcing today will be done with Chain, is designed to examine a key tradeoff in DLT design. The highly desirable resilience characteristics of DLT require sharing data on the ledger across a number, or all, network participants. But a fully replicated ledger poses clear privacy issues, and may be vulnerable to a cyber attack on whichever is the weakest link.

Let me discuss each in 9  turn . Distributed ledger technology (DLT) (3 PoCs)  DLT has in many respects been the poster-child for FinTech. Thrown into prominence by the advent of bitcoin and other cryptocurrencies, the attraction of DLT to central banks really lies in the potentially highly attractive resilience characteristics of the underlying technology. In its purest form, a DLT network operates with no centre, and every node in the network holds a full copy of the ledger. So the failure of a node has no impact on the overall resilience of the system, with transactions simply rerouting elsewhere. A single ledger could also eliminate the need for costly reconciliations between market participants, increasing efficiency and reducing operational risk. For central banks currently operating centralised payments and settlements systems with only limited redundancy and facing growing cyber and operational threats, such a model has obvious attractions. Our first DLT PoC, undertaken with PwC, proved it was possible to build a multi-node scalable DLT environment enabling the transfer of ownership of a fictitious asset. But it also demonstrated that the technology was some way from being sufficiently robust or scaleable to form the core of live central bank infrastructure such as the Bank’s Real-Time Gross Settlement (RTGS) service – a conclusion that helped inform the Bank’s plans for its RTGS renewal programme. PoCs by other central banks have reached 10  broadly similar conclusions . 9  More detailed write-ups of completed PoCs can be found at: http://www.bankofengland.co.uk/Pages/fintech/default.aspx.