Banking giants to invest $50M in blockchain-based settlement project: Report
Fri, 17 May 2019, 10:46 am UTC
A number of banking giants are teaming up for a blockchain-based settlement project, Computer World reported May 17.
The project builds on the “utility settlement coin” (USC) project, which was first proposed by UBS in collaboration with fintech startup Clearmatics back in 2015. The objective was to validate the potential benefits of the blockchain-based coin for capital efficiency, settlement, and systemic risk reduction in global financial markets.
Sources familiar with the latest development told the news outlet that around a dozen banks are now in the process of investing nearly $50 million in a new entity, called Fnality, which would take the reins to run the project. The names of the banks remain unclear at the moment.
That said, the USC project saw participation from a number of banks including Banco Santander, Bank of New York Mellon Corp, State Street Corp, Credit Suisse Group AG, Barclays PLC, HSBC Holdings Plc and Deutsche Bank AG.
"We are a member of the USC Project and can confirm that the Research & Development phase is coming to an end," a spokeswoman for Barclays said, but refrained from commenting on the investment deal.
Although the deal has not been finalized and subject to change, a source said that the new system could launch next year.
The USC project involves a digital cash instrument that would enable banks to settle transactions in a fast and secure manner. The coin would be a blockchain-based digital cash equivalent of fiat currencies, backed by cash assets held at a central bank, and would be convertible at parity.
The banking partners had previously said they have been in talks with central bank and other authorities to ensure the project meets regulatory compliance requirements.
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