Banco Central do Brasil Explores Blockchain Technology for Settlement System

Brazil’s central bank launched a new technical research paper that explores blockchain use case and examines some of the available platforms to develop working prototypes of a minimum Gross Settlement System in Real Time (RTGS).

The bank formed a study group to evaluate and analyze blockchain technology and to better understand both its applicability and its deficiencies. The work was divided into two phases: the first one that included the identification of use cases within the central bank, the selection of one of the use cases and a platform for the prototype; and the production of a minimal proof of concept of using it; and the second phase in which the use of blocks of block blocks was analyzed using the selected use case as reference point.

The report states: 

“In the case of its catastrophic failure, RTGS members would be unable to send (or receive) funds to (from) each other, leading to a complete financial halt…  In this context, the Alternative System for Transactions Settlement (SALT) is a conceptual system for a contingent solution that would be able to immediately replace core functionalities of the main Brazilian RTGS in case of its full collapse.”

According to the authors, the initial design of this system would be a blockchain network of permits where financial institutions and the central bank are validating the nodes.

“After investigations, SALT was considered the ideal candidate: functional requirements are fairly simple and straightforward,” said the report.

The Central Bank of Brazil clarified that, unlike the efforts on nblockchain of other central banks, its investigation aimed to create a minimum system of transfer of funds to the financial sector in case of a collapse of the RTGS. He did not intend to build a substitute or provide a primary settlement system.

Sources: BCB.Gov , CoinDesk 

Disclaimer: InfoCoin is not affiliated with any of the companies mentioned in this article and is not responsible for their products and/or services. This press release is for informational purposes only. Information does not constitute an investment advice or an offer to invest.

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