8 Leading Banks Join the Crypto Space
Despite the bearish trend the cryptocurrency market has seen in the last few months, eight of the world’s leading banks move to the crypto space. They admitted to developing their own decentralized networks and coins as safer and faster means of value transfer.
JP Morgan Chase was one of the first leading banks to announce early this year that it is planning to launch its own blockchain. Quorum, JP Morgan’s blockchain network is based on Ethereum and is envisioned as a tool to encourage collaboration across different blockchain networks.
At the EthCC Ethereum dedicated conference, which took place in Paris on March 9, 2018, Amber Baldet told the British publication Express that she speaks to the crypto community with the main goal to bridge the gaps between blockchain and its applicability in the banking sector. A new asset on the equity market? Yes.
According to CCN, the financial giant is taking steps to obtain patent for its distributed network. On July 19, 2018, the US Patent & Trademark Office (USPTO) published the application which outlines the method whereby users of a decentralized network can tokenize their assets and eventually trade these depository receipts.
The document also states that these receipts would be security tokens under the regulatory authority of the US Security and Exchange Commission (SEC). This means that trading of these assets is bound by SEC regulations. It is further suggested that tokens could be obligation-backed receipts or debt equity.
But this is just the beginning of the crypto revolution. JP Morgan is not the only high-profile financial institution flirting with DApp technologies. Rabobank also announced its intention to launch its own digital currency, Rabobit. Part of its Moonshot program envisioned as an internal scheme allowing the Dutch bank’s employees to pitch ideas and strategies to better serve customers, Rabobit is said to be a cryptocurrency wallet that will bridge the gap between online banking and digital cash.
The initiative was received with susceptibility by the public for the mere fact that a bank promotes it. Even Rabobank took a soft marketing stance by launching a web page just “to see if there is any interest”, a customer support rep said. Of note, the page is no longer live at the time of writing. Worrisome? Maybe, maybe not. Are they continuing to develop the product? We’re not in the position to support this, however, a step forward in the direction of a cryptocurrency banking system has been made, and that is definitely a position statement.
According to the Financial Times, other six big names in the banking sector turning to blockchain are Barclays, Credit Suisse, Canadian Imperial Bank of Commerce, HSBC, MUFG and State Street.
The big six partnered to launch the first ever “utility settlement coin”. Official voices behind the project claim that the new currency will not be the next bitcoin or a rival to the queen of cryptos, but a means to help banks develop the blockchain network to improve the transparency and accuracy of financial transactions.
Switzerland-based financial service provider UBS was the first to disclose the idea supporting the new coin set to disrupt the financial system and help solve issues of data privacy and cybersecurity.
“We have been in discussions with central banks and regulators, and we will continue that over the next 12 months with the aim of a limited ‘go live’ at the back end of 2018”, said Hyder Jaffrey, UBS head of strategic investment and fintech, in an interview with Financial Times. He also highlighted that instead of a “big bang” launch, the project will be rolled out gradually, in line with the group’s vision.
If the world’s top banks move to the crypto space, what’s next? A new banking system where crypto rules and a token economy. As the number of businesses turning to blockchain technology continues to grow, it was about time that banks shifted focus to the blockchain.
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