Global banks are ratcheting up efforts to embrace Bitcoin-style digital currency, with industry players hoping this will make settlements more efficient and chop back office costs. Bitcoin is seen by many as the wild west of currencies, with the digital payment method favoured in the criminal underworld and exchange collapses periodically knocking those who swear by the crypto money. But all those niggles are likely to become a distant memory as powerful banking groups club together to fine-tune the technology, plug potential security gaps and promote their new offering to the wider business world. A commercial launch for settling financial trades over blockchain – the technology behind Bitcoin – is expected within 18 months, with the “utility settlement coin” positioned as the industry standard. – Jackie Cameron By Martin Arnold Four of the world’s biggest banks have teamed up to develop a new form of digital cash that they believe will become an industry standard to clear and settle financial trades over blockchain, the technology underpinning bitcoin. UBS, the Swiss bank, pioneered the “utility settlement coin” and has now joined forces with Deutsche Bank, Santander and BNY Mellon – as well as the broker ICAP – to pitch the idea to central banks, aiming for its first commercial launch by early 2018. A collection of bitcoins stand in this arranged photograph in London, U.K., on Friday, Jan. 29, 2016. Photographer: Chris Ratcliffe/Bloomberg The move, to be announced on Wednesday, is one of the most concrete examples of banks co-operating on a specific blockchain technology to harness the power of decentralised computer networks and improve the efficiency of financial market plumbing. “Today trading between banks and institutions is difficult, time-consuming and costly, which is why we all have big back offices,” said Julio Faura, head of R&D and innovation at […]
