🔰Banking Giants Spearheading a New Cryptocurrency 'Utility Settlement Coin'🔰

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When global top banks decide to collaborate and create a new cryptocurrency, we know something big is on the cards. Well, the banks Barclays, Credit Suisse, BNY Mellon, Deutsche Bank, Santander, UBS, Canadian Imperial Bank of Commerce, HSBC, MUFG and State Street have decided to partner and create a new cryptocurrency 'Utility Settlement Coin' to take advantage of the potential of blockchain technology.

"The utility settlement coin, based on a solution developed by Clearmatics Technologies, aims to let financial institutions pay for securities, such as bonds and equities, without waiting for traditional money transfers to be completed. Instead, 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."

I'm sure this is going to be one of the major development surrounding the blockchain technology and its impact on the banking system. For those who are still trying to figure out what is blockchain technology, I will recommend watching this short video.

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Blockchain technology is heading towards an inflection point. This inflection point is about proven use cases which are more cost efficient than the traditional banking system. To achieve cost efficiency it appears blockchain technology will probably spread exponentially within the banking system. That's why it is very important to explore the potential use cases of blockchain technology within the banking industry.

Technology has been at the core of a number of disruptive trends and financial services and it's really been the driver. All the banks are aware that competitive pressure is one of the biggest accelerators and it is high time to explore different technological options that have the potential to re-invent how the traditional banking system can operate.

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When we think about the impacts of the blockchain it's useful to think of it with reference to trust. Every transaction fundamentally requires an element of trust. The blockchain has the power to increase the size of the many existing markets by reducing the transaction cost and to create many new markets and opportunities around those markets. All these make the financial services very ripe for blockchain adoption.

Banking services don't always have the reputation of being the tip of the spear of the innovation curve but it's good to see finally they have embraced this digital journey and has embraced disruptive technology like blockchain. I think re-designing their business model is going to have a huge impact, especially in the asset and wealth management space.

References and Further Reads: 1 & 2