Swiss Bank UBS with the support of Spanish Bank Santander, Deutsche Bank, American Bank of New York Mellon Corporation and British broker ICAP plans to launch a new digital currency based on blockchain technology (the blockchain) that is used in the calculations in bitcoin, reports the Financial Times.
In 2017, the project participants intend to obtain all necessary approvals from Central banks and other regulating financial markets bodies, and in 2018 to start commercial use of the new digital currency.
The use of digital currency will significantly reduce the time for payments, which will give opportunity to free up capital, said Haider, Jaffri in charge of the UBS innovation.
“Today, the settlements between banks and financial institutions is complex, time-consuming and expensive, that’s why we all have a huge back-offices. We are talking about streamlining and improving the efficiency of the process,” explained Julio Faura, responsible for research and development in Santander.
According to a report by consulting company Oliver Wyman for the year 2015, the global market for financial clearing is estimated at $65-80 billion per year. As the FT notes, previously, a number of financial institutions announced the establishment of its own electronic “currency”. In particular, Citigroup intends to start the system Citicoin, and Goldman Sachs is betting on SETLcoin, which should provide almost instant calculations.
The blockchain is a distributed database that contains information about all transactions carried out by members of the system. Information is stored in the form of “block chains”, each of which recorded a certain number of transactions. A key feature of this system is distributed, the registry is stored at the same time all participants in the system and automatically updated to the latest version each time you made the change. Once formed the “block” and all participants updated information, change the record already it is impossible.