Banks Turn to Blockchain Technology
November 9, 2015
Cryptocurrency has come a long way, and now big banks are taking the technology behind Bitcoin very seriously, we learn in “Nine of the World’s Biggest Banks Form Blockchain Partnership” at Re/code. Led by financial technology firm R3, banks are signing on to apply blockchain tech to the financial markets. A few of the banks involved so far include Goldman Sacks, Barclays, JP Morgan, Royal Bank of Scotland, Credit Suisse, and Commonwealth Bank of Australia. The article notes:
“The blockchain works as a huge, decentralized ledger of every bitcoin transaction ever made that is verified and shared by a global network of computers and therefore is virtually tamper-proof. The Bank of England has a team dedicated to it and calls it a ‘key technological innovation.’ The data that can be secured using the technology is not restricted to bitcoin transactions. Two parties could use it to exchange any other information, within minutes and with no need for a third party to verify it. [R3 CEO David] Rutter said the initial focus would be to agree on an underlying architecture, but it had not yet been decided whether that would be underpinned by bitcoin’s blockchain or another one, such as one being built by Ethereum, which offers more features than the original bitcoin technology.”
Rutter did mention he expects this tech to be used post-trade, not directly in exchange or OTC trading, at least not soon. It is hoped the use of blockchain technology will increase security while reducing security and errors.
Cynthia Murrell, November 9, 2015