by Joseph Young
Since September, Bank of England Chief economist and monetary analysis and statistics executive director Andrew Haldane has emphasized the significance of the distributed ledger technology and its potential to revolutionize the traditional financial sector.
This week, the central bank of the U.K. launched a blockchain challenge for bitcoin entrepreneurs, startups and developers to create blockchain-based applications that can be applied to existing banking systems and platforms.
The Bank of England will offer an exclusive invitation to meet some of the key people in the U.K. banking industry, a six-week paid internship and an invitation to its graduate programme assessment center.
Participants are expected to develop distributed ledger technology-based platforms or applications that could be used to benefit established financial institutions and banks.
“The Bank’s mission is to promote the good of the people of the United Kingdom by maintaining monetary and financial stability. The chance to contribute to society and make it better for everyone is a big reason why a role with us is so rewarding,” Bank of England announced.
The decentralized and transparent nature of blockchain technology allows anyone on the network to create unalterable and irrefutable records of information. Such features of the network could be used to verify documents, authenticate contracts and settle transfer of assets and clearance of stocks.
The bank will look into unique applications which maximize the capability of blockchain technology and will judge each project by its creativity and originality.
“Blockchain’s distributed ledger technology already maintains the Bitcoin network, and keeps a record of all Bitcoin transactions. It’s enabling universities to store and encrypt student qualification records so employers can instantly verify CVs. It’s helping insurance companies crack down on fraud and theft by giving diamonds a digital fingerprint, creating a public ledger that tracks the origin, sale and ownership of the world’s most precious stones,” the bank said.
Over the past few months, the Bank of England has maintained close relationships with bitcoin and blockchain startups in the U.K. aiming to capitalize on the limitation of traditional banking systems.
Haldane previously stated, “What I think is now reasonably clear is that the distributed payment technology embodied in bitcoin has real potential. On the face of it, it solves a deep problem in monetary economics: how to establish trust – the essence of money – in a distributed network. Bitcoin’s ‘blockchain’ technology appears to offer an imaginative solution to that distributed trust problem.”
The winners of the blockchain challenge will join the existing Bank of England blockchain research team to explore the potential of the distributed ledger technology.