Project Jasper offers promise and challenges for the future of DLT
TORONTO, May 25, 2017 /CNW/ - The Bank of Canada, along with Payments Canada, R3 and seven commercial banks, today disclosed the results of phase II of Project Jasper, an experimental wholesale interbank payment system, using digital ledger technology (DLT) – the backbone of cryptocurrencies like Bitcoin.
First launched in 2015, the project's work is summarized in a newly-released report on the Bank of Canada's website. The results show that, despite progress made, underpinning an entire wholesale payments system with DLT still faces many hurdles.
While the project demonstrated the ability to settle wholesale payments on a distributed ledger, and even incorporated an innovative liquidity savings mechanism, several important gaps remain.
"The bottom line is that a stand-alone DLT wholesale system is unlikely to match the efficiency and net benefits of a centralized system," said Carolyn Wilkins, Senior Deputy Governor of the Bank of Canada. "At its heart, there exists a fundamental inconsistency between a centralized wholesale interbank payment system and the decentralization inherent in DLT."
This work leaves open a host of areas for future research, such as exploring the integration between Project Jasper and other types of DLT-based financial market infrastructures. Joint efforts between the public and private sector offer a way forward to do just that.
"Perhaps the biggest lesson from Project Jasper is just how valuable public-private sector collaboration can be," said Gerry Gaetz, President and CEO of Payments Canada. "And while DLT offers potential opportunities in years to come, the current modernization of Canada's payments systems also require partnership between the public and private sector. Through working together, we will achieve our shared vision of a system that is fast, flexible and secure, promotes innovation and strengthens Canada's competitive position."
Full details of the Project Jasper phase II will be shared at the Payments Canada SUMMIT today at 3:50 p.m., The Westin Harbour Castle, Toronto, Ontario or view the panel discussion via live webcast (English only).
About Project Jasper
Last year, Project Jasper made headlines when it became the first known blockchain experiment to include a central bank and the private sector. The project, which involves The Bank of Canada, Payments Canada, R3 and Canada's seven largest commercial banks, seeks to understand how Distributed Ledger Technology might transform the future of payments ― starting with high-value clearing and settlement. Project Jasper has gone through two phases of experimentation to date.
About Payments Canada
Payments Canada ensures that financial transactions in Canada are carried out safely and securely each day. The organization underpins the Canadian financial system and economy by owning and operating Canada's payment clearing and settlement infrastructure, including associated systems, bylaws, rules and standards. The value of payments cleared and settled by Payments Canada in 2016 was C$51 trillion, or C$201 billion every business day. These encompass a wide range of payments made by Canadians and businesses involving inter-bank transactions, including those made with debit cards, pre-authorized debits, direct deposits, bill payments, wire payments and cheques.
SOURCE Payments Canada
For further information: Tricia Weagant, Payments Canada, firstname.lastname@example.org, 613-806-5168 or the Bank of Canada media line, 613-782-8782.