The Bank of England has issued a call for interest to third party technology providers and financial institutions in order to explore mechanisms for implementing synchronised settlement in the renewed Real-Time Gross Settlement service.
The central bank is drawing up a blueprint for an overhaul of the UK's Chaps high value payment system to accommodate new market entrants and added value services, including the concept of synchronisation or 'atomic settlement'.
Under this process, the transfer of two assets is linked in such a way as to ensure that the transfer of one asset occurs if and only if the transfer of the other asset also occurs. The Bank believes that for certain transaction types - such as housing transactions, corporate transactions and cross-border payments - synchronisation could reduce cost and risk, improve efficiency, and support innovative new methods of settlement.
Whilst the Bank is exploring whether it might implement the functionality as part of the RTGS rebuild, third parties would need to create the platforms and products that will make use of it.
As such, the Bank is now seeking to work with organisations to further explore the demand and potential, as well as to understand the design implications for organisations which would interface with the system. Interest parties are invited to register on the Bank's website or contact RTGSEngagement@bankofengland.co.uk.