Barclays, Credit Suisse Lead Six-Bank Group Developing Proprietary Cryptobr>
Six big banks have teamed to create a new digital currency, the “utility settlement coin,” that will be used in inter-bank transfers and settlements. The digital coins, which will be converted into fiat currency by the banks, would be exchanged via blockchain in an effort to speed up settlements and reduce costs.
Barclays, Credit Suisse, Canadian Imperial Bank of Commerce, MUFG, HSBC and State Street are working on the project, which originated with Switzerland’s UBS. The project is now in its second stage as discussions with central banks are underway and tweaks to its ecosystem are honed. A formal start is expected by the end of next year.
Hyder Jaffrey, UBS’ director of strategic investment and FinTech innovation, said that the implementation of the utility settlement coin may be a “stepping stone” to the banks developing proprietary cryptocurrency. Additionally, central banks can study the results as they ponder whether to develop national cryptocurrencies.