Four Global Banks Team Up to Develop New Utility Settlement Coin Based on Blockchain

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Four of the world’s largest banks have announced a plan to develop a new form of digital cash that they say will become an industry standard to clear and settle financial trades over a private, permissioned Blockchain. 

UBS, the Swiss bank, pioneered the “utility settlement coin” and has now joined forces with  — as well as the broker ICAP — to pitch the idea to central banks, aiming for its first commercial launch by early 2018, according to an article in the Financial Times.

Journalist Martin Arnold writes that 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,”  Julio Faura, head of R&D and innovation at Santander told the Financial Times. “This is about streamlining it and making it more efficient.”

The utility settlement coin, will be based on a solution developed by Clearmatics Technologies, will let financial institutions pay for securities, such as bonds and equities, without waiting for traditional money transfers to be completed. Rather they would use digital coins that are directly convertible into cash at central banks, cutting the time and cost of post-trade settlement and clearing.

The coins, each convertible into different currencies, would be stored using the Blockchain, or distributed ledger technology, allowing them to be quickly swapped for the financial securities being traded.

Read more here.

 

 

 

About Richard Kastelein

Founder, Publisher and Editor in Chief of Blockchain News and co-founder and director at Blockchain Partners in London/Amsterdam/NYC, Richard Kastelein is also an advisor with a number Blockchain startups doing ICOs including DECENT.ch, Inchain, Humaniq, Chronobank, eGaas and others.

He is regarded as one of the top journalists by the Blockchain and fintech communities – as is evident by his entry in the Top 150 Fintech journalists online and in the top 10 of the Blockchain Top 100 List. As a prominent keynote presenter, he has spoken on Blockchain at events in Gdansk, Amsterdam, Minsk, Dubai, Antwerp, Eindhoven etc, where he helped spread the cause for Blockchain technology and crypto-currency and, consequently, has built a notable network inthe scene.

In 2013, the European Commission appointed him as an expert for overseeing financing for emerging startups as a part of the European Commission’s 90 billion euro Horizon 2020 project, created in Brussels to promote innovation as a driving force of job creation and business ventures across Europe. He has also worked as an external expert for Innovate UK since 2012, judging startups for the UK government.

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