Bank of New York Mellon has become the latest addition to the Bitcoin bank party, revealing plans to look into the use of blockchain technology, according to Wall Street Journal.
Sources familiar with the industry have previously told Finance Magnates that several banks are quietly looking into how they can make use of blockchain technology. Some are even interested in bitcoin’s prospects as a currency or investment. But very few have publicly disclosed their interests, the sources said.
Recently, however, plans have become more public. UBS announced its opening of a blockchain research lab in London. Bank of NY Mellon is trying it out “to see the applicability of [Bitcoin] in our businesses,” according to CIO Suresh Kumar.
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He did acknowledge that there are challenges in adapting towards open source technology in general, and Bitcoin’s protocol in particular. Senior developer Arun Battu explained that whereas banks typically operate through client-server relationships, the decentralized Bitcoin protocol effectively makes every supporting node a server. Kumar explained:
“There is a big mindset change that comes with many of these new technologies. So if we can find a way to make it tangible, in a controlled environment like our internal employee recognition program, then we have a great opportunity to help our businesses better understand the potential value.”
It will be interesting to observe if/how many other banks disclose such plans in the near future now that their competitors have already begun to ‘cool the pot’.