Accenture, SAP, and R3 developing a blockchain-based settlement system

Accenture, SAP, and R3 are collaborating to build a blockchain-based real-time gross settlement system (RTGS). The design will enable high-value transactions faster, more efficient, reliable and secure between banks and users.

Rather than working against the system, the proposed design is spin around the idea of allowing banks and payment providers to easily integrate blockchain-based settlement system on their existing platforms. This allows banks to maintain their current payment formats.

The system will use stable coins pegged to fiat currency to serve as a proxy for central bank-issued fiat currency.

To know more about RTGS, read our article: “How Centralized Banking System Operate And Manage Our Transactions“.

Collaboration to build a new frontier in payments:

The system uses SAP Payment Engine application, which serves as the central hub for payment initiation, processing, clearing, and settlement. Additionally, the prototype integrates with R3’s Corda platform to enable interactions with RTGS systems, delivering nearly seamless interoperability between conventional and token-based payments.

“Because the current payment settlement infrastructure is highly complex and fragmented, RTGS systems that leverage DLT and cryptographically secure tokenized payments can help central banks improve efficiency and security,” said John Velissarios, a managing director and global blockchain technology lead at Accenture.

Leveraging Accenture’s experience in payment settlement, and blockchain knowledge, the alliance hopes the new system will enable peer-to-peer payments between banks that have adopted DLT as well as those that have not.

Breaking new ground in the financial industry:

Blockchain innovation continues to break new ground in the financial services industry. Many firms such as Wells Fargo, JP Morgan, Walmart are building their own blockchain-based payment settlement system. However, there is also a need to have all these independent networks connected to each other to revolutionize the financial industry.

Recently Accenture facilitated the linking of two different DLT-based payment networks (Corda and Quorum). By using Hashed Time-Locked Contract (HTLC), the participating groups were able to move assets across different networks.

The alliance of Accenture, SAP, and R3 may leverage on HTLC cryptography to integrate their new blockchain-based RTGS system to connect with different distributed ledger technology (DLT) payment systems and enable cross-platform assets transfer.