I've heard about this before - I think @maxkeiser might have mentioned it on his show - however I'm not at all worried about it competing in any way with XRP or Ripple the technology. FTR I'm on board with your XRP vs Ripple tech feelings - if XRP reaches it's previous high again I'll probably dump most of it.

Why am I not concerned? Well no matter what blockchain they are using this is an internal and private vehicle for settlement with a small number of node - which kind of defeats the point, but whatever, I guess they think they know what they are doing. They don't want anyone seeing their huge and often crooked inter-bank transfers so they need to keep it closed off to the world and not on a public blockchain, not even a public but anonymous one, especially one that could be a victim to some kind of DDoS attack or just be broken by excessive volume by other users.

I see this as an endorsement of blockchain technology and an indication they might one day extend its use to businesses and consumers. Maybe one day ATMs will not dish out paper, just coins on a blockchain.