Raiffeisen Bank International AG (RBI), an Austrian investment bank, and Billon, an enterprise distributed ledger technology (DLT) provider, joined hands to pilot a digitized version of a “national currency”.
The digital currency will be issued on Billon’s proprietary blockchain which was tested under RBI’s Elevator Lab acceleration program earlier this year.
Both the partners are planning to pilot the digital currency at the end of this year. The trial will involve RBI’s corporate and institutional clients.
Commenting on the development, Stefan Andjelic, blockchain hub lead at Raiffeisen Bank International, said: “Billon is a great example of a fintech that understands how to adapt blockchain to serve the needs of banks and their clients. Specifically, during the COVID-19 situation, banks need to partner with fintechs to innovate faster and help clients with payments processing and liquidity needs.”
Making banking transactions more efficient
Initially called RBI Coin, the tokenization platform developed by Billon, enabling banks to choose a transfer method that provides increased speed, more certainty of payment status, reduced exception handling and the ability to substantially reduce customer inquiries
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The system will supplement e-money transactions with additional documents or data, including invoices and confirmation of source of funds, for full transparency and audit trail.
Notably, JP Morgan has also developed a similar digital currency, JPM Coin, to settle intra-bank transfers for its corporate clients. Though the bank initiated the trials, it has not entered into its day-to-day services yet.
Meanwhile, many central banks are mulling to launch their own digital currencies and are studying the feasibility to launch the same.
VISA has also filed for a patent in the United States to develop a digital fiat currency, thus helping the central banks.
RBI and Billon’s proposed digital currency, however, is targeted to make the transactions within the banking ecosystem more efficient, resembling JP Morgan’s native coin.