Ripple Consensus Ledger introduces multi-signature function for banks to solve the problem of bank theft caused by SWIFT vulnerability

Ripple, a blockchain-based financial technology services platform, has announced new research advances that could protect banks from hackers, following a spate of bank thefts around the world.

Ripple's solution to ensure transaction security is to introduce a multi-signature feature to the Ripple Ripple Consensus Ledger Ledger. These thefts were caused by hackers who gained unauthorized access to bank computers and then used these compromised systems to transfer funds from the bank to overseas accounts. The funds were transferred on the SWIFT interbank transaction network.

By implementing Ripple’s consensus ledger with multi-signature capabilities, banks will be able to tighten their control over cross-border fund transfers. Multi-signature capabilities force bank transfers to obtain authorization from multiple institutions before they are executed. In addition to preserving accountability, multi-signatures also add more obstacles for hackers, who would have to break through multiple layers of the system to get authorization to transfer funds from the bank to their accounts.

Among the banks that lost funds due to the SWIFT network breach were the Bangladesh central bank and banks in Vietnam, Ecuador and Ukraine.

"These bank thefts have demonstrated that the weaknesses that exist today at the perimeter of payment networks are due in part to outdated single-signature methods," Ripple said. "Distributed financial technology solutions have new features, such as multi-signature, that are not available in traditional systems like SWIFT. Blockchain technology provides banks with a more powerful distributed security architecture."

Although multi-signature has been present in a few aspects of traditional banking, with the Ripple Consensus Protocol, these multi-signature rules will be enforced by a third party (Ripple Consensus Protocol) rather than the bank itself. This technology is a game changer for both banks and Ripple, and the cooperation between the two parties will not only bring additional security to the bank, but also ensure the further expansion of Ripple.