The settlement network as introduced enables banks to transfer funds to one another, through their accounts at the Reserve Bank, in real time. It can also be used to expand the national payments infrastructure by interlinking the payment networks of banking institutions to the settlement network.
Thankfully, this immediate cliff edge risk has been largely mitigated with the European Commission’s decision to grant temporary equivalence to the UK’s legal and supervisory arrangements for CSDs until 29 March 2021. The Central Bank will continue to liaise with the relevant stakeholders to ensure a long-term solution is implemented on time.