Banks Set to Use RSK Blockchain: An Argentinian consortium of banks and technology companies under the patronage of the Central Bank of Argentina is promoting a pilot program implementing blockchain. The system would be used to handle direct account debit claims.
The pilot was announced on April 21 by IOV Labs, the developer of the RSK blockchain. The company is part of the 2019 Financial Innovation Roundtable, which also includes Sabra Group, Banco de la Provincia de Córdoba, BBVA, ICBC, Banco Santander and others.
The group has worked for several months since the end of 2019 to create a system that would track bank account transactions through what IOV claims is a decentralized network.
Specifically, the blockchain system will handle direct debit transactions for customers, where the payment is initiated by the receiver of the funds and not the sender. Through the blockchain, the group is able to trace the claims between different participants like banks, clearinghouses and financial agents. In this pilot, blockchain solves the key problem of inter-entity messaging, creating a decentralized enterprise network.
While the system already exists and is usable, IOV Labs’ goal is to provide a simpler and more efficient alternative to traditional settlement.
The solution is being tested by the banks participating in this initiative. When the pilot ends, they will decide if the network should be enlarged with other participants or additional applications.
RSK is a smart contract sidechain
The RSK network is in many ways an Ethereum competitor, but instead of creating an independent network, it piggybacks on Bitcoin (BTC).
The network’s native token is a wrapped version of BTC, though it also has its own token called RIF. Bitcoin arrives to the network through a “federated” bridge overseen by specific entities. This is similar to many versions of wrapped Bitcoin on Ethereum.
RSK has recently been attempting to catch up to Ethereum in terms of decentralized finance functionality. It hosts two algorithmic stablecoin projects, Money on Chain and the recently launched RIF on Chain.
As Cointelegraph reported in February, RSK also launched a bridge to Ethereum, which allows swapping any token between the two networks.
The collaboration with the Argentinian financial group can be seen as an expansion into enterprise blockchain territory, currently occupied by projects like the Ethereum Enterprise Alliance, Corda and Hyperledger.