Looks like multinational banking organizations are impressed with the virtual currencies as they are trying to somewhat embrace them in one or the other form. Now Swiss bank UBS is heard to be working on a prototype virtual currency that it hopes will be used by banks and financial institutions as a basis to settle mainstream financial markets transactions.
However, the sources from UBS say that unlike the Bitcoin, the Swiss bank’s proposed “utility settlement coin,” would be linked to real-world currencies and central bank accounts. It has come to notice that the virtual coin would be used to power transactions on institutional financial platforms built on blockchain technology.
The sources claim that the virtual currency from UBS will be similar to the distributed, peer-reviewed online ledger which currently powers Bitcoin. Thus, it appears, UBS might have its own blockchain-based platform to issue bonds, and another bank might have a blockchain-based stock trading platform.
However, it has come to notice that both would use the same utility coin for settlement. Talking about the decision, a UBS executive said the bank does not plan on issuing the digital coin itself but hopes to work with other market participants that may include asset managers, regulators and market structure providers like clearing houses and exchanges.
Similar views were shared by Hyder Jaffrey, the bank’s e-commerce commercial director. He said that the bank had already reached out to potential partners, but would not comment on specific institutions. Nonetheless, UBS and other financial institutions have come to believe that blockchain technology could speed up financial transactions.
Speeding up the Transactions and Assurance of Complete Security
For instance, blockchain technology could enable financial institutions to settle trades in seconds rather than two or three days, the current time it takes. Nonetheless, it is believed that blockchain technology could also lead to reduced