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 broadly similar conclusions. more detailed write - ups of completed pocs can be found at : http : / / www. bankofengland. co. uk / pages / fintech / default. aspx. 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 / ). all speeches are available online at www. bankofengland. co. uk / speeches 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

that data in a more interactive way, putting computers alongside our staff to help them form the judgments on which monetary and financial stability depend. through the accelerator and the bank ’ s broader fintech work, we have made valuable connections with important parts of the financial and technology sector beyond the regulatory perimeter – relationships that could matter greatly in the years to come. and those engagements with fintech firms have also exposed central bankers to some very different ways of working and thinking : more agile, more willing to experiment, less bound by convention. internal ‘ hackathons ’ run by our technology department along similar lines, and aimed at identifying innovative solutions to bank - specific problems, have been extraordinarily popular and have shown central banking officials to be capable of much more radical thinking than is sometimes supposed. the firms we have worked with have also valued the experience, giving them insights on the wider application of their technologies, and the needs and thought patterns of regulators and policymakers. our feedback has been honest : positive where that is due, but also highlighting challenges or gaps where they are evident. and our work has in turn been part of the broader effort by the uk authorities to support and guide the sector. all speeches are available online at www. bankofengland. co. uk / speeches the latest wave of innovation in financial technology has shaken up traditional thinking about how to deliver financial services, defining the pace and shape of innovation in what has sometimes been quite a slow - moving industry technologically - speaking. and those four driving forces i mentioned at the start – the economic pressures on traditional business models, sharply - reduced technology barriers to entry, changing consumer preferences and pro - competition regulation – will only intensify the pace of change in the years ahead. so what are the challenges? i would pick out two. first, customer acquisition is hard! households and firms are loyal to their traditional suppliers : they will only switch if the offering is genuinely innovative, not just a good - looking piece of marketing. similar considerations apply to central banking applications. second, widespread adoption also requires attention to those two traditional characteristics of successful financial systems : scaleability and resilience. it is striking how much our conversations with leading firms have increasingly turned to these issues, even over the short period we have been running our accelerator project. these topics are dear to central bankers ’ hearts, and will play a central role in shaping the next stage in our engagement with fintech. i look forward to our conversation today. for a