Austrian Investment Bank to Pilot Digital Currency for Settlements

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 Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term 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 Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term 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

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.