Banks Are Testing No-Bitcoin Blockchain

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by Eugenia Romanenko · 3 min read
Banks Are Testing No-Bitcoin Blockchain
Chris Skinner, chairman of the Financial Services Club networking group in the U.K. and author of "Digital Bank". Photo: Chris Skinner/Twitter

The technology behind bitcoin may not just disrupt banks out of existence but also empower already existing financial system.

On Tuesday, at the Exponential Finance Conference hosted by CNBC and Singularity University, Blythe Masters, the former JPMorgan banker, CEO of Digital Asset Holdings, claimed that “the blockchain is the financial challenge of our time.” “It is going to change the way that our financial world operates,” reports CNBC.

Actually, these words can be proved, if you analyze the way the potential of the blockchain technology is growing.

In fact, arguing that the technology behind bitcoin is able to enhance settlement latency and system security for companies, Masters added that the market for financial blockchain apps will be “measured in the trillions.”

It’s true that investors keep thinking that the technology of blockchain has the potential to become even more revolutionary than the currency.

According to American Banker, several banks have been conducting successful experiments with the technology that underlies Bitcoin. So, Bank of New York Mellon created its own digital currency, BK Coins. Moreover, the above mentioned bank built an employee recognition application that rewards IT staff with the tokens, which can be redeemed for gift cards and vouchers. Another bank in Kansas is developing a risk management system using cryptocurrency technology. In addition to that, USAA has a team of researchers studying the potential of the blockchain.

“The blockchain can fundamentally reduce costs and provide real-time service,” said Chris Skinner, chairman of the Financial Services Club networking group in the U.K. and author of “Digital Bank”. “But on the other hand [bankers] want to make it centralized, which runs counter to the concept of blockchain.”

It’s obvious that the banking world is taking the digital currency seriously. So, last year, two American banks started to use Ripple Labs’ software based on bitcoin technology. Plus, in January, a company dubbed Coinbase claimed that they received $75 million from such investors as the New York Stock Exchange, the Spanish bank BBVA, former Citigroup CEO Vikram Pandit and former Thomson Reuters CEO Tom Glocer.

However, according to Wences Casares, Xapo’s co-founder and CEO, there wasn’t any important event that made Wall Street executives to take bitcoin seriously. Still, Mr.Casares states that the financial services world has been tracking bitcoin since it started to gain attention a few years ago, reports the New Zeland Herald.

“The first time they heard about it, they thought it was a joke. Now they see it’s not going away and they want to learn about how the technology works. It’s been a very gradual process.”

As the cost of the most discussed cryptocurrency decreased last year and skepticism about Bitcoin’s death rose, it was hard to see that some of the world’s most important institutions were looking to learn more about the way bitcoin was able to work for them. In fact, that interest may make bitcoin not only survive but grow and develop in the future.
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