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Thursday, October 28, 2021
Home News Bank of Canada Tests Blockchain Interbank Payment Transfer System With R3

Bank of Canada Tests Blockchain Interbank Payment Transfer System With R3

Canada’s Central Bank – the Bank of Canada said it is studying and testing the Blockchain technology for possible use in interbank payments. The proof of concept experiment was carried out in partnership with the US R3 CEV Blockchain conglomerate unifying 45 global financial companies, Canadian commercial banks and the operator of Canada’s payment and settlement infrastructure Payments Canada.

Bank of Canada Senior Deputy Gov. Carolyn Wilkins, told The Wall Street Journal, however stressed the bank would not issue digital money and would not conduct tests with public money.

“The Bank’s goal in these projects is solely to better understand the technology firsthand,” Ms. Wilkins said. “Other frameworks need to be investigated, and there are many hurdles that need to be cleared before such a system would ever be ready for prime time.” She added that many central banks are investigating similar questions.

This comes two weeks after Central Bankers at the US Federal Reserve Annual Meeting in Washington DC discussed Blockchain technology–  in particular  Janet Yellen, the Chair of the Board of Governors of the Fed Reserve, urged her fellow central bankers to study new innovation in the financial industry. Notably, she mentioned bitcoin and Blockchain specifically as innovations that needed to be understood by central banks.

Silicon Angle reported  the experimental system also includes a digital fiat currency called CAD-COIN that would be used to transfer payments between banks; under a future system banks would pledge cash collateral in a pool that the Bank of Canada would convert into a digital version with the digital currency then being used as a medium of exchange that could then be converted back to cash.

“One of the bank’s many fintech research projects, discussed earlier this week by a panel at the Payments Panaroma conference, is to build a proof of concept wholesale interbank payment system using a distributed ledger, in conjunction with Payments Canada, R3 and Canadian banks,” Bank of Canada Senior Deputy Governor Carolyn Wilkins said in a statement.“Experiments we are undertaking with DLT, such as this one, are confined to interbank payments systems.”

Richard Kasteleinhttps://www.the-blockchain.com
In his 20s, he sailed around the world on small yachts and wrote a series of travel articles called, 'The Hitchhiker's Guide to the Seas' travelling by hitching rides on yachts (1989) in major travel and yachting publications. He currently lives in Groningen, the Netherlands where he has set down his anchor to raise a family and write. Founder and publisher of industry publication Blockchain News (EST 2015) and director of education company Blockchain Partners (Oracle Partner) – Vancouver native Richard Kastelein is an award-winning publisher, innovation executive and entrepreneur. He has written over 2500 articles on Blockchain technology and startups at Blockchain News and has also published in Harvard Business Review, Venturebeat, Wired, The Guardian and a number of other publications. Kastelein has an Honorary Ph.D. and is Chair Professor of Blockchain at China's first blockchain University in Nanchang at the Jiangxi Ahead Institute software and Technology. He has over a half a decade experience judging and rewarding some 1000+ innovation projects as an EU expert for the European Commission's SME Instrument programme as a startup assessor and as a startup judge for the UK government's Innovate UK division. Kastelein has spoken (keynotes & panels) on Blockchain technology at over 50 events in 30+ cities.
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