On 25 April 2023, the Bank of England (BoE) published a statement on the renewed Real-Time Gross Settlement (RTGS) service. In the statement, the BoE confirms that the renewed service will take effect from June 2024 and will deliver benefits across a number of areas.
RTGS lies at the heart of every payment in the UK. Through RTGS, the BoE provides settlement to direct participants of CHAPS, CREST, six retail payment systems and the BoE’s Note Circulation Scheme. RTGS is also the mechanism through which the BoE implements monetary policy decisions (reserves accounts are held within RTGS and remunerated at Bank Rate), and provides liquidity to the UK’s financial system.
The renewed RTGS is intended to deliver a more resilient, flexible and innovative sterling settlement system to support monetary and financial stability. In particular, the BoE sets out four key areas in which the industry will benefit:
- Increased resilience – The resilience of RTGS will be strengthened to ensure prompt and secure settlement in a world of evolving threats.
- Greater access – The renewed RTGS service will facilitate direct access to central bank money settlement for a wider range of participants, helping to reduce tiering risks and promote competition and innovation.
- Wider interoperability – Cross-border payments and resilience will be enhanced by increasing harmonisation and interoperability between critical domestic and international payment systems.
- Improved user functionality – The renewed service will support emerging user needs in a changing payment environment.
The BoE plans to continue enhancing the service beyond 2024 to make sure it meets the changing needs of the industry. It is working closely with industry to assess business cases before deciding which features to implement beyond 2024 and in what order, with the aim of achieving even higher degrees of resilience and facilitating innovation and competition.