Connect with us

Hi, what are you looking for?


Bank of England boosts payments competition with new account

Stock Markets50 minutes ago (Apr 19, 2021 11:20AM ET)

(C) Reuters. FILE PHOTO: A general view of the Bank of England in the City of London financial district, London, Britain

By Huw Jones

LONDON (Reuters) – The Bank of England gave the green light on Monday to a new type of account at the central bank to bolster Britain’s credentials in financial innovation and open up payments to more competition.

The BoE said it would offer an “omnibus” account to cater for a wider range of anticipated payments systems, such as those based on distributed ledger technology (DLT) or blockchain, the technology which underpins crypto-assets like bitcoin.

“Under the new model, an operator of a payment system can hold funds in the omnibus account to fund their participants’ balances with central bank money,” the BoE said in a statement.

“This will allow them to offer innovative payment services, while having the security of central bank money settlement.”

A central bank account means less credit risk as potential defaults from many intermediaries will be stripped out.

Fnality, which is backed by 15 banks, said on Monday it has submitted an application to the BoE to become the operator of an omnibus account for its planned DLT-based payment system.

“This is huge for the sector,” Fnality CEO Rhomaios Ram said of the BoE announcement, adding it was a sign that authorities were becoming more comfortable with blockchain-type innovation.

“The big question before was are the authorities even going to allow something like this to happen.”

Money in the omnibus account would be owned by participants on Fnality’s platform, which include Barclays (LON:BARC), Credit Suisse (SIX:CSGN), Lloyds (LON:LLOY), UBS and Santander (MC:SAN). They would exchange stocks, bonds, derivatives and other assets directly with each other on a wholesale basis.

The change of ownership in the assets would be recorded on Fnality’s DLT accounting system without the need to go through many intermediaries, thereby saving on time and cost, while the money stayed in the omnibus account.

“This is uncharted territory for the BoE,” Ram said in response to when he could expect to receive approval for the omnibus account.

Bank of England boosts payments competition with new account

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like


Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt.


Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione.


Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum.


Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora.

Disclaimer: it's managers and its employees (collectively "The Company") do not make any guarantee or warranty about what is advertised or above. Information provided by this website is for research purposes only and should not be considered as personalized financial or health advice. Copyright © 2021 Buzz Clever. All Rights Reserved