- The Bank for International Settlements leveraged the XRP Ledger to build a new proof of concept for preserving and verifying statistical data during policymaking.
XRP has been on a roll. The native coin of the XRP Ledger saw a significant gain from roughly $1.30 per unit on Wednesday to $1.48 heading into Friday, logging double-digit percentage gains.
Analysts quickly attributed the digital asset’s rally to its positive correlation with Bitcoin (BTC), as the latter revisited the $82,000 range for the first time since mid-May. Others linked it to the optimism around the potential passage of the Digital Assets Market CLARITY Act as it proceeds to a cloture vote in mid-September.
There are also continuing positive net inflows into XRP Exchange-Traded Funds (ETFs) as institutional investors rack up exposure to the asset. However, alongside these factors came the latest report from the Bank for International Settlements (BIS).
Bank for International Settlements Leverages XRP Ledger in Proof-of-Concept
BIS released a working paper titled “Verifiable official statistics: a blockchain-based approach,” which coincided with XRP’s surge. The document revealed that it leveraged the XRP Ledger (XRPL) for its new proof-of-concept (POC) because of its low nominal fees and fast consensus finality.
Interestingly, the research didn’t center on the XRPL’s primary use case for efficient cross-border settlements. Instead, it focused on its integration with the BIS’s SDMx (Statistical Data and Metadata) platform for exchanging statistics.
The BIS highlighted that trust in published data is crucial for evidence-based policymaking. With that, the paper explored how binding each SDMx dataset to its source using blockchain technology can enhance confidence in official statistics.
Why the New BIS POC Matters
Essentially, the POC addresses an inherent problem in the current data architecture. Once data leaves central authorities and is copied, redistributed, and referenced by various publications and AI (artificial intelligence) systems, slight alterations can amplify policy errors.
Without delving into the technicalities, the framework embeds a cryptographic fingerprint for each canonical SDMx dataset. Then, it aggregates the multiple fingerprints into a Merkle root, a single final cryptographic hash that mathematically summarizes all transaction data stored within a block on chain.
The framework also anchors the root hash on XRPL, allowing users to verify data provenance and integrity seamlessly in one to two seconds. At the same time, it can maintain dataset confidentiality and privacy, since it writes only cryptographic fingerprints on-chain while keeping the raw data off-chain.
Under controlled conditions, tests on files ranging from 10KB to 8MB showed a median publication latency of three to five seconds. Moreover, it achieved a verification latency of one to two seconds.
The experimentation does not indicate the BIS’s commitment to adopting XRPL or favoring it in its policy formulation, noting that the framework is blockchain-agnostic. Nonetheless, it validates the chain’s ability to efficiently bridge real-world data with public blockchain infrastructure at an institutional level, mirroring the oracle function of networks such as Chainlink (LINK).
