While hardcore Bitcoin promoters still believe the decentralized cryptocurrency will soon overtake the established financial system, it seems more and more that the heart of Bitcoin’s innovation – blockchain technology – will be claimed by Wall Street as its own for improving performance and replacing real cash.
For example, it is now known that UBS’ blockchain-based “Utility Settlement Coin” has won the backing of BNY Mellon, Deutsche Bank, ICAP and Santander, making it more likely to be a shared common protocol agreed upon and adopted by a major share of the banking industry.
As we reported back in September 2015 the banks’ cryptocurrency or token could be linked to established national fiat currencies (EUR,GBP, USD, YEN…) and connected to central bank accounts via a shared blockchain. The Swiss global financial giant is collaborating on the project with blockchain technology startup Clearmatics.
“Digital cash is a core component of a future financial market fabric based on blockchain technologies,” commented Hyder Jaffery, head of UBS strategic investment and fintech innovation. “There are several digital cash models being explored across the Street. The Utility Settlement Coin is focussed on facilitating a new model for digital central bank cash.”
Julio Faura, head of R&D at Santander, added: “Recent discussion of digital currencies by central banks and regulators has confirmed their potential significance. The Utility Settlement Coin is an essential step towards a future financial market on distributed ledger technologies.”
“Cash is a leg to almost every trade, so this project is key to unlocking the benefits that the industry can gain from distributed automation technology in clearing, settlement and collateral management.” said, Robert Sams, Founder and CEO of Clearmatics Technologies LTD.
“As today’s settlement and clearing is a process involving many institutions, it’s vital that we collaborate with our peers to develop viable alternatives to current models, creating new digital capabilities for the financial services industry.”, added Paul Maley, Managing Director, Institutional Client Group, Deutsche Bank.
“The USC initiative provides an exciting opportunity to work closely with other industry thought leaders and the regulatory community to explore the possibilities of this technology.” said Saket Sharma, Head of Treasury Services Technology at BNY Mellon.