According to Reuters, six banks have joined Swiss bank UBS’ digital cash system plan, whereby financial institutions will be able to send payments and quickly settle transactions through blockchain technology. The system is called the Utility Settlement Coin (USC) and it is expected to be launched later this year.
The banks that have joined the plan are: Credit Suisse, Barclays, Canadian Imperial Bank of Commerce, HBSC, State Street, and MUFG. The coin is designed to act as an equivalent to the major currencies that receive the support of central banks. This means that spending the USC will be the same as spending the currency it will be paired with.
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UBS’ Head of Strategic Investment and Fintech Innovation recently told the Financial Times that the group is conducting discussions with the banks and regulatory authorities. It aims for a limited go-live stage in the latter months of 2018.
UBS initially launched the idea back in September 2015 with Clearmatics, a blockchain firm that is based in London. The project was later taken on by Deutsche Bank, BNY Mellon, Santander, and ICAP.
This technology will enable quicker processing of payments, and the coin will be easier for authorities to audit. Three additional advantages are that the USC’s technology does not demand manual processing, third party authentication or verification, and its incorporation of algorithms makes the processing automated.