Global banking giants join forces to make bitcoin technology mainstream

The “blockchain” technology R3CEV is working on underpins the internet-based bitcoin currency. The controversial “cryptocurrency” doesn’t have a central authority – its security comes from the network of all bitcoin users who share the same protocols, which together act as a distributed ledger to keep track of every transaction. Not having a central authority means that an internet-wide catastrophe would have to occur in order to compromise the integrity of the ledger.

The banks collaborating to make use of the blockchain technology in mainstream finance are JP Morgan, Commonwealth Bank of Australia, BBVA, Barclays, Goldman Sachs, UBS, Royal Bank of Scotland, Credit Suisse and State Street. They see it as a way of instantly updating payment ledgers and transferring money without relying on the trust of a central authority.

READ MORE: France’s biggest bank BNP Paribas tests bitcoins – media

Many of those in the partnership have independently expressed interest in studying the much-hyped distributed ledger system, but this is the first time that a concerted effort has been made to work it into an industry-wide standard.

“If you’re looking to introduce applications with distributed ledger technologies to improve the financial markets, you can’t have each participant working to a different pattern,” said Christopher Murphy, global co-head of FX, rates and credit at UBS told The Financial Times. “What R3 … [is] doing is bringing a consensus which could establish common standards.”

The partnering institutions will form working groups to develop blockchain prototypes and proofs-of-concept for use within the broader financial industry. R3 has already spent months working with Wall Street on the technology, including hosting industry roundtables and assisting with banks’ internal investigations, according to Coindesk.

R3’s aim is to establish consistent protocols that would create a networking effect, allowing banking information to exist in a network and be verified against the

Originally appeared at: