Banks continue to experiment with digital currency technology

Banks continue to experiment with digital currency technology

The past month has seen many banks experimenting with blockchain technology and the latest report highlight that UBS and Barclays are testing bitcoin-like Ethereum.

International Business Times states Ethereum is a non-for-profit organisation which can be mined like bitcoin, but provides an open source distributed computing platform alongside a value token.

However, when questioned, Barclays denied that extensive work was taking place to establish the technology within the bank. “You are talking about 100 or 200 people that are building stuff with this and some of them are from banks. It’s the beginning. It’s not even the end of the beginning. It’s the beginning of the beginning,” the source said according to the IB Times.

Barclays has had a major influence in the fintech industry with innovation labs and accelerators being created in order to increase efficiency. Although, the Barclays source mentioned that testing new tech at such a high level could cause problems, especially with a system like Ethereum which is difficult to debug.

The source continued to explain how this system could work if banks were willing to communicate with each other. “The whole value proposition here depends on banks being open and working together. They don’t really do this. They seem to be worried about being competitive,” as quoted in the IB Times.

The development of a govcoin was also commented upon by the source as this form of digital currency is said to prevent up to £5 billion a year in over-payments and benefit fraud, which could mean that places like the Treasury would begin offering Bitcoin bank accounts, even though they do not understand the technology, the IB Times reported.