Nine of the largest investment banks have partnered with a block chain startup to integrate the block chain into financial services.
Barclays, BBVA, Commonwealth Bank of Australia, Credit Suisse, JPMorgan, State Street, Royal Bank of Scotland, and UBS all formed a partnership with a block chain oriented firm to create industry standards for using block chain technology in banking. The initiative is led by New York and London startup R3, whose CEO David Rutter spent 32-years on Wall Street. Financial Times has reported Goldman Sachs have also partnered with R3.
The block chain is a major aspect of Bitcoin technology, functioning as a public ledger of bitcoins and its transactions. It is a distributed database that protects systems like Bitcoin from tampering and revision.
Numerous financial institutions have expressed interest in working with Bitcoin technology. Barclays, Citi, Santander, and UBS have all looked into using the block chain in banking.
“Our bank partners recognize the promise of distributed ledger technologies and their potential to transform financial market technology platforms where standards must be secure, scalable and adaptable,” Rutter said in a statement.
"These new technologies could transform how financial transactions are recorded, reconciled and reported – all with additional security, lower error rates and significant cost reductions," according to Hu Liang, Senior Vice President and head of Emerging Technologies at State Street.
R3 has the people and approach to drive this effort and increase the likelihood of successfully advancing the new technology in the financial industry.
Some research has posited banks that use block chain technology could save billions.
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