On 16 December 2024, the Bank of England (BoE) published a speech on Payment cycles: An update on the Future Roadmap for the RTGS service, which was delivered by its executive director for payments, Victoria Cleland, at FinTech Connect on 5 December 2024.  

Background

The BoE published a discussion paper on its approach to innovation in money and payments in July 2024, which outlined its approach to, and the importance of, wholesale, retail and international payments. Ms Cleland explains that the discussion paper emphasised the importance of central bank money, and that RTGS is the infrastructure that makes central bank money accessible to eligible banks and building societies as well as financial market infrastructures and their settlement participants.

There is currently a multi-year programme underway to renew that infrastructure, with the aim of providing a renewed RTGS service that has increased resilience and enables competition and innovation. The speech highlights how close engagement with users is supporting innovation in a number of key areas.

The BoE’s priorities

The speech highlights three priorities where industry has helped the BoE make progress during 2024, including:

  • Reviewing whether wider access to RTGS could be facilitated. Ms Cleland notes that the BoE is considering the feedback it received to its February discussion paper on the topic and aims to respond by Spring 2025.
  • Reviewing the case for extending RTGS settlement hours. The speech also confirms that, following its decision to extend the operating hours for RTGS, the BoE will continue to work closely with the industry on a more detailed analysis and will issue a consultation paper in 2025 outlining the final proposal for extending settlement hours.
  • Fostering wholesale settlement innovation through “synchronisation”. Ms Cleland explains that the BoE is developing a new functionality, known as ‘synchronisation’, to expand conditional settlement in central bank money to transactions that involve a wider set of assets. It plans to continue to consult and work with industry in 2025 to improve design and prepare for delivery. She also flags the BoE’s plan to embark soon on a programme of experiments to consider what additional functionality a so-called wholesale central bank digital currency could bring.