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 of industry publication Blockchain News, partner at ICO services collective CryptoAsset Design Group (helped raise over $200m+), director of education company Blockchain Partners (Oracle Partner) and ICO event organiser at leading industry event  CryptoFinancing (first ICO event in Europe) – Richard Kastelein is an award-winning publisher, innovation executive and entrepreneur. He sits on the advisory boards of half a dozen Blockchain startups and has written over 1200 articles on Blockchain technology and startups at Blockchain News and has also published pioneering articles on ICOs in Harvard Business Review and Venturebeat.
 
Kastelein has spoken (keynotes & panels) on Blockchain technology in Amsterdam, Antwerp, Barcelona, Beijing, Brussels, Bucharest, Dubai, Eindhoven, Gdansk, Groningen, the Hague, Helsinki, London, Manchester, Minsk, Nairobi, Nanchang, San Mateo, Shanghai,Tel Aviv and Venice. His network is global and extensive.
 
He is a Canadian (Dutch/Irish/English/Métis) whose writing career has ranged from the Canadian Native Press (Arctic) to the Caribbean & Europe. He’s written occasionally for Harvard Business Review, Wired, Venturebeat, The Guardian and Virgin.com and his work and ideas have been translated into Dutch, Greek, Polish, German and French.
 
A journalist by trade, an entrepreneur and adventurer at heart, Kastelein’s professional career has ranged from political publishing to TV technology, boatbuilding to judging startups, skippering yachts to marketing and more as he’s travelled for nearly 30 years as a Canadian expatriate living around the world.
 
In his 20s, he sailed around the world on small yachts and wrote a series of travel articles called, “The Hitchhiker’s Guide to the Seas’ travelling by hitching rides on yachts (1989) in major travel and yachting publications. He currently lives in Groningen, Netherlands where he’s raising three teenage daughters with his wife and sailing partner, Wieke Beenen.

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