Utility Settlement Coin Aims to Set Industry Standard for Central Banking Digital Cash

By August 25, 2016Bitcoin Business

A group of major banks; UBS, Deutsche Bank, Santander and BNY Mellon, as well as the broker ICAP, have teamed up to develop a new form of digital cash that will help to set an industry standard to clear and settle financial trades over a distributed ledger. In September 2015, Bitcoin Magazine reported that UBS was working on a prototype virtual currency to be used by banks and financial institutions as a basis to settle mainstream financial markets transactions. UBS, a Swiss global financial services company with its headquarters in Basel and Zürich, is the biggest Swiss bank and is considered the world’s largest manager of private wealth assets, with more than 2.2 trillion Swiss francs (CHF) in invested assets. The new virtual currency, dubbed “ Utility Settlement Coin ” (USC) would be used for post-trade settlements between financial institutions on private financial platforms built on blockchain technology and permit settlement of trades in seconds rather than days, with reduced risk and operational costs. To achieve this vision, UBS partnered with Clearmatics , a developer of “permissioned” blockchain technology. Permissioned blockchains, where only authorized operators can validate transactions are supported by banks and traditional financial operators wary of the open, permissionless Bitcoin blockchain and the perception of its troublesome anarchy. Now, UBS has joined forces with Deutsche Bank, Santander, BNY Mellon and ICAP to propose the USC to central banks, aiming for its first commercial launch by early 2018. "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 Clearmatics Founder and CEO Robert Sams. The group will collectively build on the successful outcome of initial explorations of the USC concept, performed by UBS and Clearmatics, […]

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