Why banks are betting on the blockchain – not bitcoin – to transform the financial sector
Wednesday, August 5, 2015
Rather than being lauded for its elegant mathematical model, bitcoin was, up until fairly recently, in danger of becoming more notorious for its wildly volatile price fluctuations, collapsing exchanges and links to the wild west of the drug and guns trade. Established banks, for the most part, appeared to be steering well clear of the cryptocurrency.
Fast forward just a short time, however, and some of the biggest players are now openly discussing their use of bitcoin, or more accurately, its underlying technology – the blockchain.
From Deutsche Bank to UBS, which opened a blockchain innovation lab in London earlier this year, to Barclays and Santander, the world’s largest banks have revealed they are testing the increasingly popular distributed ledger technology. This means striking partnerships with startups, creating proof-of-concepts and even pilot programmes to see how the blockchain can keep them at the forefront of fintech innovation.
So why the change of attitude?
- digital payments