Banks to Invest $50 Million into Blockchain Settlement Process

Multiple banks around the globe are planning to build a 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 tamp 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 tamp Read this Term-based settlement system by investing $50 million, according to a May 17 Reuters report.

Around a dozen banks are involved in this project and are planning to establish a joint entity called Fnality. However, the anonymous source of the publication could not reveal the identity of the banks.

Though the participants are aiming to launch the platform in 2020, the deal has not been finalized yet.

A similar project on the way

This is not the first blockchain-related project by a consortium of banks. In 2015, UBS Group AG and London-based technology startup Clearmatics proposed a similar clearing and settlement technology by leveraging blockchain to make the markets more efficient.

Apart from UBS, the other banks participating in the project are Banco Santander, Bank of New York Mellon Corp, State Street Corp, Credit Suisse Group AG, Barclays PLC, HSBC Holdings Plc and Deutsche Bank AG.

Commenting on the progress of that project, a spokesperson from Barclays told Reuters: “We are a member of the USC Project and can confirm that the Research & Development phase is coming to an end.”

Blockchain has the potential to reshape the inefficient and expensive settlement process between banks. Companies like Ripple are developing bank-specific solutions to address the current settlement issues. The San Francisco-headquartered startup also partnered with more than a hundred banks across the globe to bring them into its network.

Earlier this year, Wall Street giant JP Morgan revealed that the bank is working on the development of its native digital currency called JPM Coin to enable instant transfers of 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 between institutional accounts.

Meanwhile, the World Bank and Sydney-headquartered Commonwealth Bank have issued a bond on a private blockchain and also has enabled the facility to record all secondary market transaction data of that bond on a decentralized ledger.