If you can’t beat them…
Six of the world’s biggest banks have teamed up with UBS to pilot a project to create a new kind of digital cash that is designed to exploit the blockchain technology that already facilitates bitcoin transactions.
Barclays, Credit Suisse, and HSBC are among the major organisations to announce their collaboration with UBS over the ‘utility settlement coin’ (USC), a virtual currency that was originally the brainchild of London start-up Clearmatics. Further discussions with central banks, as well as a review of data privacy and cyber security measures are scheduled but it’s hoped that the USC will speed up settlements and could bring central banks one step closer to the introduction of a formal digital currency.
Head of strategic investment and fintech innovation at UBS, Hyder Jaffrey, said in a statement that discussions would continue over the next 12 months, with the aim of a limited ‘go live’ towards the end of 2018.
New currency options
Since crypto-currency bitcoin’s successful transition from experimental concept to globally accepted currency with a market value of more than $10 billion, central banks have become interested in investing in exploring the potential of digital currencies for themselves.
Countries including the UK, Russia, Canada, Australia and China are now looking at options for creating their own digital currencies and, while research is at an early stage, there’s a general recognition that the introduction of digital currencies is inevitable.
That’ll do nicely
Could cash become obsolete? It seems unthinkable. Although advancements in technology mean we can now pay for even small purchases with a quick tap of the credit card, there’s nothing quite so reassuring as having a wallet filled with crisp $20 bills.
That said, banks and other financial institutions would prefer it if cash became a thing of the past. So far, central banks’ anti-crisis measures have included cutting interest rates to the bone and various quantitative easing (QE) programs. More recently, we’ve seen countries like Japan and Sweden imposing negative interest rates in order to further stimulate economic growth.
Who is that masked man?
The identity of the man behind the development of the bitcoin is still unknown, despite a raid by police on the home of an Australian tech entrepreneur who was named by US publications Gizmodo and Wired as the creator of the cryptocurrency on the basis of leaked interview transcripts.
More than ten police officers arrived at the house of Craig Wright in the Sydney suburb of Gordon ready to perform a search of the property, although the raid was apparently not related to the bitcoin claims, according to the Australian Federal Police, who said: ‘The AFP can confirm it has conducted search warrants to assist the Australian Taxation Office at a residence in Gordon and a business premises in Ryde, Sydney. This matter is unrelated to recent media reporting regarding the digital currency bitcoin.’
People who claim to know Wright have expressed doubts about the likelihood of his involvement, with some saying they believe Gizmodo and Wired have been the victims of an elaborate hoax.