Ripple Losing the Central Bank Race: Experimental Bank of Canada’s “Cross Border, Cross Currency” System Runs on Corda.
In market boosting news, the Bank of Canada (BoC) is building a proof-of-concept system with help from the private sector and academia. The objective, is to help them (BoC) better understand new financial technologies of which blockchain and DLT is top priority.
Bank of Canada Partners Exclude Ripple Net
What’s interesting is that the central bank and R3 did collaborate when writing Project Jasper’s white paper. Project Jasper is a collaborative initiative between the government and the public sector. Its experimentation will help them test how efficient blockchain solutions are for wholesale fund transfer. In Phase I and II the bank was in the exploratory stage. The goal then was to observe how DLTs clear and settle high value interbank transactions. Afterwards-depending on with initial outcomes, the BoC would give the go-ahead for DLT integration in core financial systems as Forex and securities.
Generally, the BoC main goal is to ensure that Project Jasper complies with existing financial standards. That means it should meet terms under the Principles for Financial Market Infrastructure (PFMIs). Adherence to PFMIs allows easy oversight for systematically important infrastructure. So far, Project Jasper is on track. It meshes well with collateral requirements, credit, liquidity and settlement risks set by PFMI.
Project Ubin, Stellar are Already Successful
Aside from R3 involvement, the BoC did partner with MIT Media Lab and other central banks. This includes Monetary Authority of Singapore, the European Central Bank and the Bank of Japan. That’s not excluding the South African Reserve Bank . The overall objective is to create a “cross border, cross-currency” system. Needless to say, the system need to be efficient, faster and cheaper once there is complete integration.
Project Ubin has been proven to “satisfy the key functions of a real-time gross settlement (RTGS) interbank system in terms of volume, liquidity savings mechanisms, gridlock resolution, security, immutability, and resilience.” Similarly, Project Stella by the European Central Bank and the Bank of Japan concludes that DLT systems would be capable of processing the typical volumes experienced by modern interbank RTGS systems.
Now, Bank of Canada (BoC), Payments Canada, R3, TMX group, and Accenture have released a report detailing the findings of Jasper Phase III and the feasibility of clearing and settling securities over a proof of concept leveraging on R3’s Corda platform after successful simulation. John Velissarios of Accenture said the platform “is for clearing and settlement of securities and it could play an important role in promoting financial market integration”.
Does this mean R3 Corda Platform is ready to take on Ripple Net?