BIS Develops On-Chain Verification System Using XRP Ledger for Economic Data

The Bank for International Settlements (BIS) has released a working paper detailing a proof-of-concept system that employs the XRP Ledger to verify the authenticity of economic datasets. This initiative aims to improve the reliability of official statistics by allowing independent verification of published data.

Published on September 2, the BIS's Working Paper No. 1374 outlines a system that generates cryptographic fingerprints of datasets and anchors them on the XRP Ledger. This process addresses a significant gap in the current standard for exchanging official statistics, known as Statistical Data and Metadata eXchange (SDMX), which lacks a built-in mechanism for verifying data integrity.

When a dataset is published, the system creates a SHA3-512 hash and organizes these hashes into a Merkle tree structure, which is then anchored on the XRP Ledger. Additionally, it generates a W3C Verifiable Credential for each dataset to authenticate the publisher. The prototype demonstrated impressive performance, achieving a median publication latency of 3 to 5 seconds and a verification latency of 1 to 2 seconds, with transaction costs as low as $0.000003.

The choice of the XRP Ledger was driven by its low transaction fees and rapid consensus finality. However, the BIS clarified that this research is experimental and does not signify a commitment to production implementation or an endorsement of the XRP Ledger.

Importantly, the system does not store actual statistical data on-chain; it only anchors cryptographic hashes, ensuring that data integrity can be verified without revealing the underlying information.