Four top banks join forces on new digital currency

Posted on: Aug-2016 | By: 9 Dimen | Business Services

BNY Mellon, Deutsche Bank and Santander, plus U.K. brokerage ICAP, UBS will join their hands to work on the Utility Settlement Coin (USC), which they hope will be a quicker and more efficient alternative to the current clearing and settlement process.

The coin will be aimed at banks' institutional clients and will use blockchain, the technology behind bitcoin. Blockchain works like a vast, decentralized ledger, recording every transaction made with bitcoin, the worlds most-widely used pure-digital cash system. Several financial institutions are interested in the broader applications of blockchain technology.

UBS says the USC could decrease the complexity and time taken to settle trades, cutting risk and improving capital efficiency for users.

The coin's success would rely on widespread adoption by financial institutions, so the participation of BNY Mellon, Deutsche Bank and Santander may be a step in the right direction for UBS.

However, several other top banks are working on their own digital-only payment systems, including Goldman Sachs and Citi.