RBC pilots Blockchain technology for cross-border fund transfers

Canada’s biggest bank, the Royal Bank of Canada (RBC), is conducting a pilot test on the use of Blockchain technology for fund transfers and payments to and from the U.S. as of late September 2017 as part of its existing payments system.

The technology was created based on the open-source technology that is maintained by the Hyperledger Blockchain consortium.

In an interview with Reuters, RBC Executive Vice President Martin Wildberger claimed that the technology, which he dubbed the “shadow ledger,” enables the monitoring of payments as they pass between US and Canadian banks in real time.

He added that the technology provides such benefits as reduced costs and simplified transactions for financial institutions.

“We wanted to set it up as a shadow ledger so that we can demonstrate our leadership in exploiting that technology while at the same time recognizing that the technology is still early in its adoption phase.”

Wildberger further stated that the use of Blockchain and distributed ledger technology can significantly improve and simplify the functionality of banking systems.

Other RBC initiatives on Blockchain technology

RBC is advancing other projects involving Blockchain technology. Among the initiatives are the experiments with various use cases for Blockchain like loyalty offerings and consumer rewards. In 2016, the bank’s executive vice president (EVP) of contracts, Linda Mantia, claimed that the bank was conducting research on the possible use of Blockchain in smart contracts and for capital markets.

Canadian central bank’s position on Blockchain

Meanwhile, the Canadian central bank, Bank of Canada, has stated in May 2017 that there are various “stumbling blocks” toward the adoption of the technology in the banking industry. The bank, however, claimed that the potential of Blockchain to be integrated into the entire payment system in the near future is very promising.