Blockchain, a promising technology that underpins bitcoin, arouses interest in the largest financial institutions all over the world. A number of projects suggesting using the technology in the financial sphere have already been developed.
We reported some time ago that Goldman Sachs, as well as eight more major banks, plans to adopt the blockchain technology thus broadening its role in the financial sector. The banks see low risks of fraud and high level of transparency as the main benefits of using blockchain. New York-based financial innovation firm called R3CEV acts as a partner and helps applying the technology to the needs of financial institutions.
Kevin Hanley, Director of Design at Royal Bank of Scotland, commented: “The collaborative model we’ve established with R3 and the other banks is a very effective way to deliver robust shared ledger solutions to the financial services sector. Right now you’re seeing significant money and time being spent on exploration of these technologies in a fractured way that lacks the strategic, coordinated vision so critical to timely success. The R3 model is changing the game.”
Later 13 of the world’s leading banks joined innovation tech startup R3 to design and apply distributed ledger technologies to global financial markets. The group will collaborate on research, experimentation, design, and engineering to help advance state-of-the-art enterprise-scale shared ledger solutions to meet banking requirements for security, reliability, performance, scalability, and audit. R3 and its bank partners will establish joint working groups to lead these efforts, which will leverage the R3 team as well as experts within the partner banks.
Today the news appeared that Goldman Sachs Group Inc., a large multinational investment banking company, has developed its own cryptocurrency for a settlement system for trading stocks, bonds and other assets.
The application for a new virtual currency called SETLCoin has been published only recently. However it was filed in May 2014. Goldman Sachs says in the patent application that SETLCoin guarantees “nearly instantaneous execution and settlement” for trades. The currency aims at facilitation and acceleration of securities trade.
Yesterday Goldman Sachs sent an Emerging Theme Radar research note to its clients saying that “While the Bitcoin hype cycle has gone quiet, Silicon Valley and Wall Street are betting that the underlying technology behind it, the Blockchain, can change… well everything.” Indeed blockchain is believed to be able to cut costs and challenge the profit pool of the middle-man and to make centralized institutions useless.