Big Banks are studying a new Bitcoin

Four big banks are working to create a new Bitcoin to facilitate interbank transactions and that would save about 20 billion dollars a year.

The project for the creation of a new digital currency similar to Bitcoin, comes from four largest banks: UBS, Deutsche Bank, Santander and BNY Mellon. Even the British broker ICAP is involved in the idea, in order to start using the new currency from 2018.

All four banks are members of the consortium known R3, engaged in the search for new ways to implement the distribution of technology in financial markets.

As reported by the Financial Times, the idea came from UBS, which has also joined forces with three other banks and with Icap broker, and will now be submitted to the central banks, with the aim of reaching a first commercialization at the beginning of 2018. It is one of the most concrete example of collaboration between banks to reduce costs and improve the efficiency of an initiative on digital currencies. "Today the exchanges between banks and institutions are difficult, expensive in terms of cost and time lost. The question is to streamline the process and make it more efficient," said Julio Faura, responsible for innovation, research and development for Santander.

Although other banks have already conducted research on various blockchain technologies to simplify interbank processes, this is the first currency to have the support of such a powerful banking group.

Meanwhile, Citigroup is working to its own digital currency called "citicoin" while Goldman Sachs has filed a patent for his "SETLcoin" and a group of hedge funds and traders, according to some, it is developing a new currency by 'SETL " .

If implemented on schedule, the new digital currency of these four major banks would be the first currency blockchain officially used between major financial institutions – but the concept of a regulatory reporting currency between banks and central banks is not new. The blockchain technology allows cryptocurrency to be exchanged with a "validation" by operators scattered across the network, without the existence of a central brain to command structure. Before opposed to fears of fraud, banks have also familiarized with the concept and we have seen a business opportunity. First, the cost of managing transactions between banks is estimated up to 80 billion dollars a year, so the first target would cost containment.

Then, the time required to close the exchange of securities would be reduced, avoiding the wait for the passage of money: the use of virtual money into real money converted at the central banks would facilitate the operations.