Banks and Technology Companies Work To Have Their Own Digital Currencies
- Banks are now working with blockchain technology and digital assets
- The goal is to offer solutions to old and recurrent problems
According to a recent report released by Reuters, there are several banks that have invested millions of dollars in order to create a “digital cash system” for financial transactions around the world. Some of these financial institutions include UBS, Credit Suisse, Barclays and also Deutsche Bank.
Financial Companies Work On Their Own Cryptocurrencies
As reported by Reuters, a source involved in the project said that the research and development stage had come to an end. There is a large interest from financial companies and banks in blockchain technology and digital assets, but should this make crypto enthusiasts worried?
Financial institutions are creating these virtual currencies and testing blockchain technology because they know they are able to reduce costs and also transaction times for transfers. However, these initiatives are going to be permissioned networks or centralized currencies, which is completely against what cryptocurrencies promote.
These banks and institutions are working on the project called Finality that wants to make more efficient clearing and settlement in financial markets. Thus, financial companies are working in order to solve issues that were affecting the space since 1970. The goal seems to have a working solution for the next year.
Social Media Giant, Facebook to Launch GlobalCoin
There are other firms such as Facebook that are also working on their own digital currencies and blockchain networks. Facebook is developing the so-called GlobalCoin that is expected to help users have access to the financial world, make transactions and receive payments through Facebook’s applications.
Facebook is working on its Project Libra that will see the creation of a stablecoin and it will be used to facilitate payments. Some users speculated that this was going to be harmful to Bitcoin and other digital currencies. With this GlobalCoin, some users would no see the need to use a digital currency such as Bitcoin.
However, according to Andreas Antonopoulos, Facebook’s GlobalCoin is expected to be harming banks rather than the crypto industry. Facebook will have to be compliant with several AML and KYC policies and regulations that are generally applied to banks, which means that the digital asset would not be working as decentralized crypto but as a centralized digital currency.
Banks will also be losing clients that prefer to have a fast and cheap way to transact funds between each other and to make payments.