LHV Bank in Estonia is developing a financial product, ‘Cuber’ (Cryptographic Universal Blockchain Entered Receivables), based on colored coins technology.
The product is being tested as a new form of certificate of deposit. Its initial phase involves the issuing of €100,000 worth of “cryptographically protected” receivables claims against the bank. It is designed to store, generate and transfer value as well as manage liquidity and automate transactions.
The project serves as a springboard for a larger FinTech initiative, Cuber Technology, that is looking to develop mobile apps using the blockchain to enable free p2p fiat transfers. It is slated for beta later this year.
LHV Bank focuses on online banking and bringing innovative products to the market, with a minimal presence in physical branches. It joins financial giants including UBS, Bank of NY Mellon, USAA and possibly Deutsche Bank in exploring how blockchain technology can streamline operations. A number of others are working with the Ripple protocol in a similar capacity. LHV is one of the first to work with colored coins technology and get its hands on actual bitcoin in some way.
FBS CopyTrade Launches a New Card Scanning Feature!Go to article >>
Colored Coins is a protocol that envisions Bitcoin’s blockchain for a variety of financial applications, including smart contracts and securities transfers. The concept involves the designation, or ‘coloring’, of Bitcoin data for near-instantaneous property transactions over the blockchain without the need for a central clearing party.
Rain Lõhmus, Cuber Technology’s CEO commented:
“The potential of Cuber is huge – think telecommunication industry developments last 20 years. How many new cool applications [that] we are daily using have come out from Development Departments of telecom companies. No, they are coming from startups. This is possible due to the widespread usage of decentralised TCP/IP protocols.”
The bank wants to drive innovation with smaller software developers and start-ups, and less at large banks.
The open source nature of Cuber is designed to allow cryptocurrency exchanges and other developers tap into the technology.