UBS and a number of other big banks around the world are working together to develop a cross border trade settlement platform that uses blockchain technology. I’ve been skeptical of bitcoin and other crypto-currencies, but I have always maintained that blockchain technologies would prove the most valuable part of the crypto-currency revolution. Paul Vigna reports at The Wall Street Journal on this latest effort:
A group of financial firms led by UBS Group AG UBS -0.70% plans to start using a bitcoin-like token to settle cross-border trades, one of the biggest developments yet in the effort to make use of nascent blockchain technology.
The 14 firms—a group that includes big banks in the U.S., Europe and Japan—have created a new company to control development of the token, called the utility settlement coin, or USC. They have collectively invested £50 million ($63.2 million) in the company, Fnality International.
The launch of the USC project, four years in the making, may herald a new phase in the banking sector’s adoption of blockchain, the record-keeping technology that underpins bitcoin. A number of blockchain projects are moving out of the experimental phase and into production, a sign that the technology is becoming more integrated in the global financial infrastructure.
The USC token would function both as a payment device and messenger that carries all the information required to complete a trade, potentially cutting down on a transaction’s time and cost.
Processing a trade can involve multiple parties, especially if it includes a cross-border trip. Trades can take days or weeks to clear, and failed trades, in which one party ultimately doesn’t complete its end of the deal, are common.
With a blockchain-based system, all the functions performed by intermediaries are baked into the transaction itself.
Read more here.
You can find some of my past writings on blockchain technologies here:
- Can IBM Revolutionize Foreign Exchange with Blockchain?
- Will the Dow’s Mega-Companies Use Blockchain to Change the World?
- The Big Implications of Blockchain
- Can Blockchain Survive Crypto-Mania?
Originally posted on Your Survival Guy.