Oh look, the big banks have taken notice of cryptocurrencies. And, they are going to the new DL (distributed ledger) technology to streamline payment mechanisms between themselves. How? They are going to have their own cryptocurrency, or utility tokens. Cool. Not just “little” banks either. Yeah, UBS, HSBC, Barclays, etc could actually replace clearinghouses and the other back office functions to reduce costs and speed up transactions. Just one more way the financial world is changing and adapting to the “new world”, and we’ve been reporting about blockchain settlements through groups such as Goldman Sachs, R3, DTCC and many more for quite some time.
The world’s biggest banks aren’t immune from cryptocurrency euphoria, with a range of projects underway to explore how traditional financial firms can benefit from the innovation. Swiss banking giant UBS and 10 other companies say that they plan to use the technical idea behind bitcoin—a distributed ledger called a blockchain—for their own digital currency (paywall). This could show the way for the world’s biggest central banks to do the same.
Banks like Barclays and HSBC are the latest to join the “utility settlement coin” project, started by UBS and Clearmatics Technologies in 2015. The idea is to develop a new, streamlined payment mechanism for institutional purposes. According to CoinDesk, it could potentially replace clearinghouses and other back-office plumbing that sits between buyers and sellers of assets.
Alex Batlin, who heads BNY Mellon’s blockchain projects, led work on utility settlement coin at UBS at its inception. For him, it’s an example of blockchain technology’s promise to remake finance. “Blockchain is a really good, resilient system,” he said in an interview earlier this summer. “The interesting thing about bitcoin is since its inception, no one’s cracked it. Yet it’s completely in the open.” BNY Mellon is also involved in the utility settlement coin project…”
Full Story at Quartz.com