Bitcoin technology piques interest on Wall Street

NEW YORK – Most people still think of Bitcoin as the virtual currency used by drug dealers and shadowy hackers looking to evade the authorities.

But the innovations that have helped turn Bitcoin into the most popular virtual currency are now being viewed as a potentially enormous disruptive force for several industries, including accounting, music and journalism.

Nowhere, though, are more money and resources being spent on the technology than on Wall Street — the very industry that Bitcoin was created to circumvent.

“There is so much pull and interest on this right now,” said Mr Derek White, chief digital officer at Barclays, the British global bank that has a team of employees working on about 20 experiments that explore how the technology underlying Bitcoin might change finance. “That comes from a recognition that, ‘Wow, we can use this to change the fundamental model of how we operate to create our future’.”

Many of the top minds in finance have come to believe that the software that brought the virtual currency into existence also enables a fundamentally new way of transacting and maintaining records online — allowing people and banks to directly exchange money and assets, such as stocks and bonds, without having to rely on a long chain of expensive middlemen.

A few banks have gone public with their work, but most of the activity has been happening behind the scenes. At one private meeting, held in April at one of the Manhattan offices of Bank of America, executives from more than a dozen large banks gathered to confidentially discuss how the technology underlying Bitcoin could be used to change foreign currency trading, the largest financial market in the world, according to people who attended the meeting.

Central banks such as the Federal Reserve and the Bank of England

Originally appeared at: