New York-based blockchain startup Digital Asset Holdings announced today that Goldman Sachs and IBM have joined its recent funding round, pushing the total amount raised above $60m.
The firm, which as reported earlier this week, is conducting a distributed ledger trial[1] with JPMorgan Chase, has now garnered support from a total of fourteen financial institutions.
Other parties in the round[2] include ABN AMRO; Accenture; ASX Limited; BNP Paribas; Broadridge Financial Solutions; Citi; CME Ventures; Deutsche Börse Group; ICAP; Santander InnoVentures; The Depository Trust & Clearing Corporation (DTCC); and The PNC Financial Services Group, Inc.
The round marks the second publicly disclosed investment in the bitcoin and blockchain space for Goldman Sachs, which last year took part in bitcoin services provider Circle’s $50m funding round[3].
Paul Walker, global co-head of technology for Goldman Sachs, said in a statement:
“We believe that distributed ledger technology will play a transformative role in the way financial institutions transact globally and we look forward to working with Digital Asset and the broader financial and technical community to engage this emerging technology.”
IBM is making its first publicly disclosed investment a company focused on technology, a move that follows months of internal testing and development of proofs-of-concepts. The firm is now playing a leading role in the Open Ledger Project[4], an open-source initiative that also involves Digital Asset.
“We are excited to jointly develop distributed ledger technologies that will allow our clients to transform their business, and further strengthen our partnership with Digital Asset,” said Jerry Cuomo, the IBM Fellow leading the firm’s blockchain efforts, adding:
“Blockchain holds real potential to transform a wide range of industries and IBM is committed to making it ready for business.”
Distributed ledger startup R3CEV announced the addition of three new banking partners to its blockchain project last week, raising the total number of banks involved to 25.
The list of partners includes banking giants such as Goldman Sachs and Santander, both of which have already dipped their toe in the world of crypto through investments in Circle Internet Financial[1] and Ripple[2], respectively.
For some of the other banks, this partnership with R3 marks their debut in the increasingly trendy distributed ledger space, which is broadly seeking to apply the underlying technology of bitcoin to use cases for enterprise financial institutions who have expressed reservations about working on the bitcoin network.
Though critics are quick to assert[3] the potential long-term benefits of a global distributed ledger, R3’s banking partners are currently working with the startup on alternatives.
Listed by Forbes as the third largest company[7] in the world in 2010, Bank of America is a multinational banking and financial services corporation.
The company – which employs approximately 200,000 people worldwide – is part of the “Big Four Banks” in the US alongside JPMorgan Chase, Citi and Wells Fargo
Last month, the US Patent & Trademark Office (USPTO) published a patent[8] filed by Bank of America which sets out to protect a system for wire transfers using the underlying blockchain of a given cryptocurrency as the payment rails.
In December 2013, Bank of America became one of the first banks in the US[9] to discuss bitcoin, issuing a client note which said that the digital currency had “clear potential for growth”.
2. Bank of New York Mellon
Founded in: 2007 as a result of the merger of The Bank of New York and Mellon Financial Corporation
BNY Mellon is a global investments company employing more than 10,000 people and delivering investment management[11] services in 35 countries and over 100 markets.
As of 31st December 2014, BNY Mellon had $28.5tn in assets under custody or administration, and $1.7 tn in assets under management.
In April this year, The Wall Street Journal reported that the bank’s developers had been experimenting[12] with bitcoin’s open-source code for use as part of the bank’s newly created corporate recognition program. The so-called “BK Coins” would be awarded to staff for contributions to the bank’s software development.
Last month, the American multinational banking corporation published a report[13] that said blockchain technology could potentially transform payments.
The company’s VC arm Mitsubishi UFJ Capital Co[17] invested in bitFlyer’s recent $4m funding round completed through third-party allotment, which consists of issuing new shares to a limited number of investors.
Citi bank is the consumer division of financial services multinational Citigroup.
Bailed out by US government[19] in 2008, the bank was also awarded Global Bank of the Year at London-based financial magazine The Banker‘s annual awards.
Speaking at Consensus[22], held in New York in September, Debra Brackeen, the global head at Citi’s Innovation Center said the bank was looking at blockchain’s use cases in clearing, settlement and trade finance.
The German global banking and financial services company employs over 10,000 people and is active in 70 countries[28] where it specializes in investment banking, asset management and transaction banking.
A recent letter[29] from the German megabank suggested that it was exploring the use of the blockchain for a series of potential applications.
HSBC claims[32] to be one of the world’s largest banking and financial services organisations, serving approximately 48 million customers through its global businesses.
Present in 72 countries across Europe, Asia, the Middle East, North Africa, North America and Latin America, the bank has over 6,000 offices worldwide. It is listed on the London, Hong Kong, New York, Paris and Bermuda stock exchanges.
The National Bank of Australia is one of the country’s four largest[39] financial institutions by both market capitalisation and clients.
Employing over 10,000 people, the organisation operates in Australia, New Zealand, Asia, the UK and the US.
In April 2014, the bank distanced itself from bitcoin[40], informing bitcoin-related customers that it would be closing their accounts within a month. The news proved significant at the time because the bank had to date, been viewed as one of the country’s most bitcoin-friendly banks.
The Royal Bank of Canada is one of the country’s largest banks, serving more than 16 million clients throughout offices in 40 countries.
In May 2013, the Royal Bank of Canada told Canadian bitcoin exchange Virtex that it would shut down its accounts[44]. According to Virtex’s founder, Joseph David, the bank did not specify the reasons for its decision although he said it may be related to Virtex not having the necessary documentation to operate.
Skandinaviska Enskilda Banken AB, also known as SEB, is a Swedish financial group.
In an interview with CoinDesk[48] in September, Rasmus Järborg, head of strategy at SEB, said the bank’s new partnership with R3CEV was part of its ongoing research into blockchain technology, which intensified following bitcoin’s price spike in late 2013.
He added:
“As a leading corporate and institutional bank, the business-facing applications are immediately of more interest to us. However, we are a universal bank in Sweden and the Baltic countries and as it is quite early to predict which part of our business will be impacted first. We are looking at both [consumer and business applications] at the moment.”
“Underneath [bitcoin] lies the technology of the blockchain and I think that will be transformative.”
In October, the UK banking giant signed contracts [57]with graduates of its New York-based FinTech accelerator, two of which are expected to partner with the company on blockchain-related applications.
The multinational Spanish banking group was created from a merger of Banco Bilbao Vizcaya and Argentaria in 1999 and is now one of Spain’s biggest banks.
Speaking at the time[61], BBVA Ventures executive director Jay Reinemann, said his company’s investment should not indicate that BBVA is willing to open itself up to bitcoin companies just yet.
A report published[62] in August said that blockchain technology would first be useful in the payments space, where it would eradicate the need for intermediaries and decrease costs for banks.
The Commonwealth Bank of Australia (CBA) announced in May[65] that it would use Ripple technology to facilitate payments between its subsidiaries.
CBA’s Chief Information Officer David Whiteing was quoted in the press as saying that the bank had “done a whole bunch of experiments” with bitcoin and other cryptocurrency technologies.
“Bitcoin is a protocol which is now being replicated by non-asset based vendors like Ripple and others. We absolutely see that’s where it’s going to go. The bank has a role to play in that,” he added.
“In just five years, the new bitcoin currency has grown from a small niche project by some computer geeks into a global phenomenon – despite some dubious transactions. And devotees of the bitcoin system are already predicting the next upheaval in payment transactions. But first things first: What are bitcoins anyway? And why are they so groundbreaking?”
Earlier this year, Goldman Sachs published a report[72] which stated that bitcoin and other cryptocurrencies were part of a technology “megatrend” which could change the fundamental mechanics of transactions.
JPMorgan Chase’s chairman Jamie Dimon has been one of the more outspoken critics of bitcoin and digital currency, while acknowledging that his bank could learn[76] from disruptive payment systems such as bitcoin earlier this year.
Dimon issued new remarks about bitcoin and blockchain technology during the Barclays Global Financial Services Conference in New York in September.
During his question-and-answer session, Dimon noted that JPMorgan was optimistic about the potential use cases[77] for distributed ledger technology, but has continued to suggest that global governments will not allow the use of cryptographic tokens as digital currency for much longer.
The Royal Bank of Scotland (RSB) is a subsidiary of The Royal Bank of Scotland Group plc, which together with NatWest and Ulster Bank, provides banking facilities across the UK and Ireland.
RBS is expected to demo[80] its blockchain-based proof-of-concept – which uses Ripple’s technology – as part of a £3.5bn technological revamp.
More recently, the bank made headlines after its technology chief officer said it had experimented with its its own in-house cryptocurrency[81].
The corporation – which employs over 10,000 people –is one of the oldest financial institutions in the US.
According to a report by The Wall Street Journal[84], State Street is currently experimenting with the technology for use in institutional banking as well as the processing and monitoring of loans, mortgages and other financial products.
At the time, company representatives said they were curious about whether the bitcoin blockchain was the right technology for asset transfer use cases.
State Street senior managing director Hu Liang told the media outlet:
“That’s what we’re trying to understand. From a business point of view, we’re trying to understand identity. Between partners in a transaction, you want to see each other’s trades but you don’t want others to see them. And you want regulators to have oversight. So, how do we do that?”
The Swiss investment bank made headlines[86] earlier this year after it announced it was set to open a blockchain research lab in London’s Canary Wharf.
In interview with CoinDesk, Alex Batlin, the former engineer who now heads the research lab, said:
“In principle it’s [blockchain technology] probably one of the biggest confluences of technology and business right now.”
Mizuho Bank, Ltd was created as the result of a merger between Mizuho Corporate Bank and Mizuho Bank in July 2013.
The bank has offices in over 30 countries and according to its LinkedIn page[90] is one of the largest financial services companies in the world, with total assets amounting to over $1.6 tn as of March this year.
Of the banks involved, Mizuho has perhaps the longest track record of engaging with the bitcoin and blockchain industry, having served as a banking partner for now-defunct bitcoin exchange Mt Gox.
Mizuho is currently embroiled in ongoing lawsuits[91] related to its partnership with the company.
UniCredit is a leading commercial bank in Europe with an international network spanning 17 European countries and 50 markets. The bank has approximately 9,000 branches and employs almost 150,000 people.
The Australian Competition and Consumer Commission (ACCC) has confirmed it is investigating the actions of banks in the country, after they reportedly closed down the accounts of various bitcoin businesses.
“It is being investigated. We have already spoken to some banking representatives and sought some information. It is all still early stage, but under way.”
The chairman added: “We are asking the banks why they acted as they did and what contact there was between them.”
The investigation was prompted by Queensland Nationals Senator Matthew Canavan, who reportedly urged the ACCC to investigate whether the banks had acted in an anti-competitive manner, after they reportedly decided to shut the accounts of some 17 bitcoin businesses[2].
Nine major investment banks including J.P. Morgan Chase and Goldman Sachs have partnered with distributed ledger startup R3CEV.
The partnership will see collaborative efforts between the institutions take shape, work that will include the development of standards for using blockchain technology within the broader financial industry.
The banking group includes Credit Suisse, State Street, UBS, Commonwealth Bank of Australia, BBVA, Barclays and Royal Bank of Scotland. Many on the list have previously announced independent efforts to study blockchain tech, and the banks are said to be investing money in R3 as part of the effort.
The banks and R3 will form working groups as part of the development of blockchain prototypes and proofs-of-concept. R3 has spent months[1] working with Wall Street financial institutions on the technology, a process that included hosting industry roundtables and assisting on internal investigations by banks.
R3 CEO David Rutter said of the partnership:
“This partnership signals a significant commitment by the banks to collaboratively evaluate and apply this emerging technology to the global financial system. 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.”
Representatives from the banks involved said the partnership helps harmonize development of the technology in a bid to promote more comprehensive work.
“Right now, you’re seeing significant money and time being spent on exploration of these technologies in a fractured way that lacks the strategic, coordinated vision so critical to timely success. The R3 model is changing the game,” said Kevin Hanley, director of design at Royal Bank of Scotland.
Participation by the banks, according to one representative, is reflective of the growing interest among large financial institutions in blockchain tech.
“These new technologies could transform how financial transactions are recorded, reconciled and reported – all with additional security, lower error rates and significant cost reductions,” said Hu Liang, State Street SVP and head of emerging technologies. Bank image[2] via Shutterstock
A Goldman Sachs analyst has revealed further insight into the global investment banking giant’s developing thesis on bitcoin and blockchain technology.
In a podcast[1] released this summer and highlighted by a recent New York Times[2] piece, global investment research analyst Heath Terry addressed both bitcoin and the blockchain, praising the distributed ledger as a technology that would have “massive implications” for asset and ownership transfer.
“We’re first pitch, first inning in terms of seeing how companies are going to use the technology,” Terry said, adding:
“It’s fascinating in really early stages, but it’s hard to see a world where blockchain technology doesn’t change the way we think about asset ownership.”
Part of the firm’s “Exchanges at Goldman Sachs[3]” series, the talk, recorded in June and published in late July, was meant to promote “The Future of Finance”, an annual report on disruptive financial technologies and concepts produced by its research team.
The three-part paper is the latest from Goldman Sachs to highlight bitcoin and the blockchain’s potential applications for asset transfer. Previous entries have spotlighted[4] the technology’s applications for remittances and among merchants.
Elsewhere, the podcast discussed trends in finance including peer-to-peer lending, crowdfunding and mobile payments, while focusing on the financial habits of millennials.
Notably, Terry and fellow analyst Ryan Nash chose to describe this demographic as credit card and debt averse, stating that they believes these consumers better understand the cost of financial products, including the transaction fees associated with their use.
Bitcoin adoption
The podcast found Terry addressing various questions about bitcoin as an implementation of blockchain technology as well, though his conclusions as to the viability of this application were markedly more negative.
Terry indicated that he believes the adoption of bitcoin as a currency has been held back by its fluctuating price against fiat currencies.
“The volatility around bitcoin scares a lot of people, it was great in those periods when bitcoin only seemed to go up,” he said. “It’s gone up, it’s gone down and it’s gone up. For a lot of people, the point of having a secure currency the way bitcoin is supposed to be is having a secure store of value, having a way to transfer value.”
Terry further suggested that he has concluded bitcoin is not currently competitive against traditional payment methods, noting it has been primarily used in instances when alternatives are not available.
Still, he implied he was bullish that bitcoin or blockchain-based systems could succeed on their value proposition as a kind of digital cash, concluding:
“Over time though bitcoin is going to mature, a lot of that volatility will likely come out of the system. You’ll probably see more use cases as it does.”
The Estonian central bank has denied statements that have suggested the country’s banking system relies on the use of a blockchain to secure information.
One of the more curious observations included in documents recently released by the European Securities and Markets Authority (ESMA) was a submission from Deutsche Bank[1].
The letter, a response to ESMA’s call for information[2] on digital currencies, included the claim that the blockchain was already being widely used in the country’s financial sector. The claim was cited by Deutsche Bank as an example of how blockchain technology is being used to solve complex problems in the world’s financial markets.
When contacted for comment, Piret Putko, a representative for Eesti Pank[3], Estonia’s central bank, told CoinDesk that while there is activity among the country’s banks to develop products based on the technology, there is no nationwide effort to broadly integrate banking and the blockchain.
Putko noted:
“I guess that blockchain is expected to be put into operation in Estonia soon because one of our banks is developing new products which will be based on blockchain. But, it certainly does not give us the right to say that Estonian banking infrastructure is secured with a blockchain.”
He added that Deutsche Bank may have confused an existing card security system with the blockchain concept.
Putko’s refers to ongoing projects at LHV Bank, a major domestic bank that has been conducting experiments with bitcoin and earlier this year developed a wallet product for the digital currency.
When reached for comment, bank representative Priit Rum echoed this sentiment, suggesting that the two systems had been confused.
“Although for example we at LHV bank are experimenting with blockchain – this infrastructure has not been used that thoroughly here [in] Estonia,” he said.
Blockchain technology will bring either doom or opportunity to securities services firms, according to European banking giant BNP Paribas.
Writing in the bank’s magazine, Quintessence[1], research analyst Johann Palychata said the bank forecasts two scenarios: “total disruption” or new, improved services for the institutions who handle the world’s trades.
He added:
“In its purest form, a distributed blockchain system allows all market participants direct access to the DSD (Decentralised Securities Depositary), to the exchange and to the post-trade infrastructure (clearing & settlement). If this setup develops then existing industry players might be redundant.”
Despite this disruptive potential, investors may still require institutions to hold their private keys, due to the difficulty of protecting them. These same custodians may launch their own network or provide an application layer on top of the blockchain, he added.
In the alternative outcome put forward by the bank, industry players will integrate blockchain technology as part of their “next generation of IT infrastructure”. This means they will remain in control, with only authorised market participants able to record and track trades on the ledger.
“They may deploy new services that they could not in the past because the investments required were a huge barrier to entry,” he added.
Post-trade
One startup banking on the “total disruption” of the ‘post-trade’ ecosystem – where ownership is transferred from buyer to seller after a trade – is Digital Asset Holdings[2], which uses distributed ledger technologies to settle digitised and non-digitised assets.
Helmed by ex-JP Morgan executive Blythe Masters, the firm recently acquired two startups, Hyperledger and Bits of Proof, in its quest to siphon volume from firms like the Depository Trust and Clearing Corporation (DTCC), which clears $1.6 quadrillion annually.[3]
One of the world’s top custodians, BNP Paribas Group[4] offers securities services to its 13,000 corporate[5] and institutional clients across 57 countries. The bank, which also offers retail services, is active in 75 countries worldwide, reporting $39.2bn in revenue for 2014.
In an interview[6] with The Banker this week, Philippe Denis, chief digital officer of the bank’s securities services, revealed the company had run brainstorming sessions around blockchain technology for 40 of its employees.
BNP Paribas is currently developing “a handful” of test cases for its operations across custody, fund administration and transfer agency, he said, adding:
“A lot of the process that one associates with the current network model can disappear. You could make do without a central securities depositary.”
Bitcoin services company Coinplug has snatched the top prize in a financial technology competition sponsored by major banking group JB Financial Group.
Over 100 companies vied for a total prize pool of 130m Korean won ($116,200) at the FinTech Frontiers Fair[1] held in Seoul, South Korea.
JB Financial Group[2] is a financial services company with over 35.5 trillion Korean won ($32.3bn) in assets and 3,300 employees. It is one of the leading innovators of financial technology in East Asia.
Coinplug[3]‘s winning entry, which scored 50m KRW ($45,500), was a system utilizing the bitcoin blockchain to verify user identity in online transactions. It works by taking a cryptographic hash of a user’s personal information and using that hash to create a certificate, which is then recorded on the blockchain as a transaction.
The blockchain’s permanence means that information cannot be altered or modified once saved. Personal information is further protected from leaks, since Coinplug uses only the hashed information to verify, never seeing the original. No personal information needs to be stored at all.
Benefits over existing systems
Coinplug CEO Ryan Uhr told CoinDesk the system offered three main benefits: accessibility on more web browsers, security of private information, and reduced cost of issuance.
The blockchain system can be used in any web browser and does not require additional software such as ActiveX or NPAPI, which need plugins for proper operation. The certificates can also be re-issued easily on Coinplug’s smartphone application.
Chief Security Officer Dr Joo Han Song and Researcher Saang Lee led the project
Coinplug[4] is already in talks with several financial organizations who are interested in offering the service, and Uhr said winning first prize at a mainstream even definitely made other companies pay attention.
“When blockchain-based authentication systems become a widely used method for financial transactions and e-commerce payments, there will be a very interesting and noticeable change in the market for user certification.”
Cost advantage
South Korea’s e-commerce and banking systems are currently required to authenticate users with Microsoft’s ActiveX technology, running only on Windows and in the Internet Explorer browser (see details below).
Coinplug’s system would also deliver significant cost savings, Uhr added.
The current market size of Korea’s user certificate system is around 120bn KRW ($110m), with each new certificate issuance for an individual running at 4,400 KRW ($4) and 110,000 KRW ($110) for a corporation. Registering instead through the blockchain would cost just the 0.0001 BTC (30 KRW, or 3 cents) transaction fee.
Coinplug now needs to wait for official government approval to work its system into the national financial infrastructure.
Particularly important for Korea
Coinplug’s use of blockchain technology could free Koreans from a legacy 1990s e-commerce law[5] unique to that country, one that has prompted several security concerns.
In that decade, South Korea developed a local encryption system called SEED, designed to encourage e-commerce by providing user authentication with digital certificates. The only problem was that all e-commerce sites needed to verify the certificates with Microsoft’s ActiveX plug-in.
Since ActiveX is supported only on Windows, Korean users were locked into using that system and the Internet Explorer browser. ActiveX is known to have several security flaws, increasing risk of hacking attacks and personal information leaks, with even Microsoft now discouraging its use[6].
This system is only now beginning to disappear[7] from Korean networks. A law in 2010 mandates that companies who wish to authenticate users with non-ActiveX technology must prove to the government their system offers the same level of insurance.
Polish payment processors and at least one bank in the country have closed the accounts of local bitcoin exchanges.
BitBay[1], Cryptoins.com[2], bitmarket24pl[3] and Bitmarket.pl[4] confirmed that the regional payments processors they work with – CashBill and BlueMedia – had informed them that their accounts were being closed at the request of their own partner banks.
Bitmarket.pl told CoinDesk that PKO Bank Polski had also informed them that their bank accounts were being closed.
Representatives from CashBill and BlueMedia confirmed that the closures had taken place. A spokesperson for CashBill[5], who declined to provide specifics, told CoinDesk that the company had been informed by “various banks” in Poland that continued work with bitcoin exchanges “will result in termination of our services in those banks”.
The spokesperson continued:
“Our aim is to provide 100% payment channel coverage of for all our customers. This has forced us to immediately terminate our operations with all bitcoin exchanges.”
BlueMedia[6] declined to comment on the specifics, but noted “in general, we always warmly welcome such initiatives based on technologies and innovation. However, security always comes first. Our decision was made exclusively based on fraud risk and assessment”.
Fraud cited
When reached for comment, PKO Bank Polski[7] representative Michal Tkaczuk declined to comment on the account closures, calling it “a subject of bank secrecy”.
Tkaczuk provided the following statement:
“In our opinion virtual currency markets are poorly regulated. Client identification and procedures use by bitcoin exchange platforms are inadequate and raise legal doubts. Taking this into account, PKO Bank Polski acts to prevent suspicious transactions.”
Notably, the CashBill representative suggested that the company had an interest in bitcoin, but that the legal liabilities represent too great a risk.
“We would gladly add bitcoin payments to our payment channel portfolio, but sadly bitcoin is not currently regulated in any way by Polish law and doing so would constitute a legal risk for our operation,” concluded the spokesperson, adding that the change in policy “left us puzzled”.
Sudden notice
At least one of the exchanges indicated that the shutoff was a surprise, with a representative for Cryptoins.com telling CoinDesk that CashBill had terminated its contract “without prior notice”.
Mariusz Sperczyński, a spokesperson for Bitmarket.pl, said that its bank, PKO Bank Polski, had decided to terminate accounts with the exchange, a loss that occurred as its BlueMedia account was also suspended.
Bitmarket.pl previously had its bank account suspended[8] by Bank BPH in January this year. Sperczyński said that the impact of the latest closures was minimal.
The impact on BitMarket24.pl appears to have been more significant. A spokesperson told CoinDesk that its revenues had fallen sharply owing to the fact that 95% of its payments were previously channeled through CashBill.
Justyna Laskowska Witek, a marketing specialist at BitBay, said CashBill informed them earlier this week that it had received instructions from its bank partner to terminate its agreement with the digital currency exchange.
Since CashBill terminated its contract, Witek said that BitBay’s daily trading volume – previously 1000 BTC on an average day – had decreased.
“However, we are trying to overcome this problem,” she added.
Blockchain technologies could reduce banks’ infrastructural costs by $15-20bn a year by 2022, a new report from Santander InnoVentures claims.
The FinTech 2.0 Paper[1], produced in collaboration with Oliver Wyman[2] and Anthemis Group[3], says distributed ledger technology could save banks money by eliminating central authorities and bypassing slow, expensive payment networks.
Beyond payments, its authors identify other areas of potential for distributed ledgers, noting:
“In time, distributed ledgers will support ‘smart contracts’ – computer protocols that verify or enforce contracts. This will lead to a wide variety of potential uses in securities, syndicated lending, trade finance, swaps, derivatives or wherever counterparty risk arises.”
Blockchain technology could also increase investor confidence in products whose underlying assets are opaque or where property rights are made uncertain by the role of central authorities, the report says.
Other “attractive features” of the technology include transaction irreversibility, near-instantaneous clearing and settlement and a reduced margin of error, as individual transactions are openly verified by a community of network users.
“Commercial banks, central banks, stock exchanges and major technology providers, such as IBM and Samsung, are all exploring the potential uses of distributed ledgers […] It is only a matter of time before distributed ledgers become a trusted alternative for managing large volumes of transactions.”
The publication of the report follows Santander InnoVentures[4] managing principal Mariano Belinky’s statement[5] at the FutureMoney conference that distributed ledgers have the potential to “transform” banking as we know it.
Speaking to CoinDesk in April[6], Belinky claimed bitcoin’s underlying technology would gain mainstream traction sooner than the digital currency itself.
Blockchain trend
Santander InnoVentures’ report on blockchain tech is the latest contribution to what is considered to be a growing trend among mainstream banks.
Just last month, the Euro Banking Association (EBA), released[7] a report which stated that distributed ledgers had the potential to lower costs, increase speed and improve product offerings.
Similarly to Santander’s report, the EBA publication highlighted that cooperation among Payment Service Providers (PSPs) and the crypto community was necessary as it would determine the future relationship between traditional banks and the ‘2.0’ sector.
