Argentina’s Central Bank (BCRA) Announces Development of Dlt-based Clearing System

The Central bank of Argentina (Banco Central de la República Argentina – BCRA) announced on the 22nd April 2020 that it is currently determining the feasibility of an interbank decentralized solution to handle direct end-to-end account debit claims made by customers. The proof-of-concept (PoC) solution will require a close collaboration between key market participants including, but not limited to, banks, central counterparty clearing houses (CCPs), technology providers and other key financial actors in the market.

IOV Labs, a Gibraltar-based firm will lead the development of the technology behind this new payment system on top of its RSK blockchain technology. The ‘Blockchain Group’ will work to test this solution and are comprised of the following stakeholders: IOV Labs, Sabra Group, Banco de la Provincia de Córdoba, BBVA, ICBC, Banco Santander, BYMA, Interbanking and Red Link. The objective is to ensure that the BCRA has comprehensive traceability and transparency to be able to track and monitor the status of each claim in real-time. The intention would be for this PoC to lead the way for further development and refinement for a new interbank clearing system.

Diego Gutiérrez Zaldívar, CEO of IOV Labs has stated: “We are convinced that, by implementing this type of platform, the financial system will be able to build an integral, collaborative ecosystem in line with the current modern technological advances and on par with the world’s most innovative financial systems. Given the global circumstances we are facing, we need now more than ever to use technology in order to optimize processes and provide better services to our citizens.”

Argentina is one of a handful of regions currently deploying a range of blockchain solutions to the clearing and settlement ecosystem in order to optimize processes, transparency and efficient management in the new technology-driven era. The Australian Securities Exchange (ASX) is in the process of replacing its ‘Clearing House Electronic Subregister System’ (CHESS) to a distributed ledger technology (DLT) solution. This will be developed by a specific technology company that builds DLT for highly regulated institutions such as financial market infrastructure (FMI) providers.

Although implementation timetables for the development of these platforms have been shifted in light of the COVID-19 crisis, it is clear that market participants are fully committed to explore DLT solutions in order to improve their operational and technical capacities.

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