UK’s central banking authority, the Bank of England is working on the development of PoC (proof-of-concept) investigation on how to retain confidentiality over a distributed ledger-based network while permitting a stringent summary of the data.
Associating with blockchain startup named Chain that creates infrastructure protocols for the project, the Bank of England published a paper that explained of how it is discovering methods to sustain data privacy at high-level among its participants in the distributed network and facilitating transactions of diverse financial assets at the same time.
The ultimate scenario showed by the central bank would be to develop a distributed ledger system in such style that transactions stay private at the same time maintaining all the shared data on the network while holding the regulatory view of the all the transactions as well.
The PoC which is meant to create an intellectual perceptive, and not a solution inclined to practicality, enforces to think about the central bank’s progressive move of distributed ledger technology (DLT) development for current business purpose with complete avoidance to disguise of transactions from the authorities.
The paper was released after the Bank of England rolled a plan to press on DLT solution as a foundation for future generation, for real-time gross settlement system, which is currently under testing by the bank.
Scalability is the main obstacle as per the central bank. As the organization directs towards the DLT system, it is believed to be the top trade-offs. Whilst disagreeing that the idyllic set-up is hypothetically probable, the Bank of England strained that the technology at present is at a burgeoning stage.
However, there is need of additional exploration in terms of trade-off, specifically with respect to scalability, threat around the safety of the cryptographic method engaged, and speed of transaction processing.