We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Big Banks Team Up to Develop Blockchain Settlement System
Read MoreHide Full Article
Wall Street's increasing focus on digital currency technology has been affirmed yet again with the recent teaming up of a group of financial giants for the development of Utility Settlement Coin (USC). It is a digital cash model based on blockchain that aims to facilitate payment and settlement for global institutional financial markets.
Swiss banking giant UBS Group AG (UBS - Free Report) and London-based Clearmatics initiated USC last September “to validate the potential benefits of USC for capital efficiency, settlement and systemic risk reduction in global financial markets”. The successful conclusion of the first phase of this project led to the joining of Deutsche Bank AG (DB - Free Report) , The Bank of New York Mellon Corp. (BK - Free Report) , Banco Santander, S.A. (SAN - Free Report) and brokerage ICAP to develop the concept further. The group also plans to undertake test in a real market environment.
USC is a series of cash assets implemented on distributed ledger technology and is entirely backed by cash assets held at a central bank. With a version for each of the main currencies including USD, EUR, GBP and CHF, USC would be convertible at parity with a bank deposit in the related currency. According to a joint release, spending a USC will be equivalent to spending its real-world currency.
The group of financial institutions will focus on the financial structuring of the USC and its implications in the broader market. Alongside they will remain engaged in discussions with central banks and regulators to ensure a regulation compliant and efficient framework within which the USC can be implemented.
Hyder Jaffrey, Head of Strategic Investment & FinTech Innovation at UBS Investment Bank stated, "Digital cash is a core component of a future financial market fabric based on blockchain technologies.” He further added, "There are several digital cash models being explored across the Street. The Utility Settlement Coin is focused on facilitating a new model for digital central bank cash."
Paul Maley, Managing Director, Institutional Client Group, Deutsche Bank noted, "As today's settlement and clearing is a process involving many institutions, it's vital that we collaborate with our peers to develop viable alternatives to current models, creating new digital capabilities for the financial services industry.”
Blockchain Buzz
Blockchain, the “digital ledger” or the underlying technology behind Bitcoin, has gained attraction for its significant potential to revamp the extensive and complex network of bank payments as well as settlements. While Bitcoin was one of the first cryptographic currencies that drew attention in 2009, several other cryptographic currencies are currently available including Novacoin, Namecoin and Dogecoin.
Last December The Goldman Sachs Group, Inc. (GS - Free Report) filed a patent application with the US Patent & Trademark Office for a new cryptocurrency called SETLcoin. While Citigroup Inc. (C - Free Report) is currently working on the development of its own digital currency “Citicoin,” JPMorgan Chase & Co. (JPM - Free Report) partnered with start-up firm Digital Asset Holdings earlier this year to launch a trial project that utilizes the blockchain technology.
Bottom line
The latest development tied with Blockchain platform crops up as banks are embracing technology and are continuously looking out for ways to restructure daily operations, update back-office functions and making huge investments for auto execution of transactions. While banks and regulators continue to explore prospects and benefits of digital currencies, concerns including security and impact on the broader financial system still lingers.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Big Banks Team Up to Develop Blockchain Settlement System
Wall Street's increasing focus on digital currency technology has been affirmed yet again with the recent teaming up of a group of financial giants for the development of Utility Settlement Coin (USC). It is a digital cash model based on blockchain that aims to facilitate payment and settlement for global institutional financial markets.
Swiss banking giant UBS Group AG (UBS - Free Report) and London-based Clearmatics initiated USC last September “to validate the potential benefits of USC for capital efficiency, settlement and systemic risk reduction in global financial markets”. The successful conclusion of the first phase of this project led to the joining of Deutsche Bank AG (DB - Free Report) , The Bank of New York Mellon Corp. (BK - Free Report) , Banco Santander, S.A. (SAN - Free Report) and brokerage ICAP to develop the concept further. The group also plans to undertake test in a real market environment.
USC is a series of cash assets implemented on distributed ledger technology and is entirely backed by cash assets held at a central bank. With a version for each of the main currencies including USD, EUR, GBP and CHF, USC would be convertible at parity with a bank deposit in the related currency. According to a joint release, spending a USC will be equivalent to spending its real-world currency.
The group of financial institutions will focus on the financial structuring of the USC and its implications in the broader market. Alongside they will remain engaged in discussions with central banks and regulators to ensure a regulation compliant and efficient framework within which the USC can be implemented.
Hyder Jaffrey, Head of Strategic Investment & FinTech Innovation at UBS Investment Bank stated, "Digital cash is a core component of a future financial market fabric based on blockchain technologies.” He further added, "There are several digital cash models being explored across the Street. The Utility Settlement Coin is focused on facilitating a new model for digital central bank cash."
Paul Maley, Managing Director, Institutional Client Group, Deutsche Bank noted, "As today's settlement and clearing is a process involving many institutions, it's vital that we collaborate with our peers to develop viable alternatives to current models, creating new digital capabilities for the financial services industry.”
Blockchain Buzz
Blockchain, the “digital ledger” or the underlying technology behind Bitcoin, has gained attraction for its significant potential to revamp the extensive and complex network of bank payments as well as settlements. While Bitcoin was one of the first cryptographic currencies that drew attention in 2009, several other cryptographic currencies are currently available including Novacoin, Namecoin and Dogecoin.
Last December The Goldman Sachs Group, Inc. (GS - Free Report) filed a patent application with the US Patent & Trademark Office for a new cryptocurrency called SETLcoin. While Citigroup Inc. (C - Free Report) is currently working on the development of its own digital currency “Citicoin,” JPMorgan Chase & Co. (JPM - Free Report) partnered with start-up firm Digital Asset Holdings earlier this year to launch a trial project that utilizes the blockchain technology.
Bottom line
The latest development tied with Blockchain platform crops up as banks are embracing technology and are continuously looking out for ways to restructure daily operations, update back-office functions and making huge investments for auto execution of transactions. While banks and regulators continue to explore prospects and benefits of digital currencies, concerns including security and impact on the broader financial system still lingers.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>