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Why Banks must adopt Digital Currency

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Why Banks Must Adopt Digital Currency

Financial Institution ICAP explained why banks must adopt digital currency in the near future.
Recently a 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. 
ICAP Michael McFadgen explained 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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Satoshi

Banks want to issue their digital currencies

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A few international banks want to issue their digital currencies soon. 
According to a recent report, those banks include UBS, BNY Mellon, Deutsche Bank and Banco Santander.
These four banks, also members of the R3 Blockchain Consortium, are working together with ICAP, a UK e-broker and aim at developing a cheaper way to do money transfers using digital currencies.
This banking group didn’t make an official announcement yet, but the new cryptocurrencies are expected to be available in 2018. 
Speaking about the pros of using digital currencies, Banco Santander commented that the traditional banking system makes it hard for banks to cooperate. 
To avoid this problem, banks could use the blockchain to transfer funds between wallets within a couple of minutes. 
Those banks want to issue their digital currencies to implement the same process that happens through the blockchain into the traditional system. 
To do so, they are working to create their cryptocurrencies to be used only within their network and banks will be miners that validate and store transactions on a blockchain. 
According to Oliver Wyman, this system can save banks between $65-$80 billion a year.

Open your free digital wallet here to store your cryptocurrencies in a safe place.

Satoshi