UBS is working on a block chain based “settlement coin” that financial institutions will use, according to The Wall Street Journal. Unlike bitcoin, the UBS “utility settlement coin” would link to real-world currencies and central bank accounts.
Oliver Bussmann, CIO of Switzerland-based UBS, said the coin will help establish the block chain in global finance. The currency, being developed with Clearmatics, a London-based firm that makes clearing machines for OTC markets, could reduce transaction settlement times. The coin could reduce settlement time from two or three days to a matter of seconds.
UBS’ new cryptocurrency lab in London is leading the initiative, according to Financial News, a London-based newspaper.
Bank Will Use The Coin With Market Players
Alex Batlin, head of the UBS lab, said the bank does not plan to issue the digital coin itself. Instead, UBS will work with other market participants such as buy-side firms, regulators and market structure providers for an industry-wide product.
“Obviously we need to collaborate with other parties around the market in the space, with the regulators, with the central banks, to take this forward,” said Hyder