Why Banks Must Adopt Digital Currency

Financial Institution ICAP explained why banks must adopt digital currency in the near future.

a and create a new digital currency to be used within financial institutions with the goal of improving fund transfers and reducing costs. Recently group of banks announced their project to build a private blockchain and create a new digital currency to be used within financial institutions with the goal of improving fund transfers and reducing costs.

Called the “Utility Settlement Coin”, this program was created by Clearmatics and tested by UBS, BNY Mellon, Deutsche Bank, and Banco Santander.

This consortium is also participated by ICAP, but the company decided to stand apart from this project for now, because a new settlement system based on a cryptocurrency that works in a private blockchain could be disruptive for their business.

ICAP, in fact, is an electronic dealer broker and provider of post trade risk services, carrying out transactions for financial institutions and private individuals, so exactly the kind of infrastructure that the USC might impact.

But, ICAP doesn’t want to go against modernity and innovation so it wants to let people understand how a proprietary distributed network should be adopted. Also, ICAP said it might join the project later.

Michael McFadgen explained to ICAPexplained to Coindesk

“A long-term vision for market infrastructure based on distributed ledgers is that it has some common layers that the market uses widely. One of those layers is hopefully the Utility Settlement Coin. We will likely be building on top of that.”

A private Blockchain

The Utility Settlement Coin works on a blockchain called “Decentralized Clearing Network” and it aims at providing easier access to central bank-issued cash.

ICAP also announced they completed a test with startup Axoni to convert trade data from banks, so it could be processed on a private blockchain, but this program is not overlapping with with the USC one.

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