A group of made up of 14 Banks have rolled out a plan to develop a cryptocurrency that will be used to settle cross-border payment.
The Banks headed by UBS Group include; Barclays PLC, Nasdaq Inc., Credit Suisse Group AG, Bank of New York Mellon Corp., Canadian Imperial Bank of Commerce, State Street Bank & Trust Co., Banco Santander SA, Commerzbank AG, ING Groep NV, KBC Group NV, Lloyds Banking Group PLC, Mitsubishi UFG Financial Group Inc. and Sumitomo Mitsui Banking Corp.
The Banks are reported to have collectively invested $63.2 million in the development of the cryptocurrency they name “Utility Settlement Coin” (USC).
The coin will help carry out cross border payment and hold all information about the payment which will ensure that all the task is done without a third party involvement. This is to save time. Remember that normal bamnk transfer take days to get executed in a process they call the incubation period, this is as a result of the processes it will have to go through before arriving at its destination. But Blockchain doesn’t require all of that, it carries along the money and information about method of execution and complete the task without a third party.
The head of strategic investment at UBS, Hyder Jaffrey, in an interview to The Wall Street Journal said:
“You remove settlement risk, the counter-party risk, the market risk. All of those risks add up to costs and inefficiencies in the marketplace”.
This is another mainstream implementation of Blockchain and in this case cryptocurrency. The entrance of banks into the crypto world analyst say may be a pathway to mainstream adoption of cryptocurrencies.