Six new banks have joined UBS (TIKER: UBS.NYSE) in its effort to launch a digital cash system which aims at allowing financial markets to make payments and settle transactions quickly via blockchain technology, which cryptocurrency such as Bitcoin (TIKER: BTC.EXANTE) and Ethereum (TIKER: ETH/USD.CRC) operate under, Fortune reports.
Barclays (TIKER: BARC.LSE), Credit Suisse (TIKER: CS.NYSE), Canadian Imperial Bank of Commerce (CM.TO), HSBC (TIKER: HSBC.NYSE), MUFG and State Street have joined the group developing the “utility settlement coin” (USC).
USC is a digital cash equivalent of each of the major currencies backed by central banks. It would be convertible at parity with a bank deposit in the corresponding currency, making it fully backed by cash assets at a central bank.
"It may well inform the way central banks choose to move things forward. We see it as a stepping stone to a future where central banks issue their own cryptocurrency at some point,” HSBC's director of financial technology innovation, Hyder Jaffrey said in an interview.
UBS first launched the concept in September 2015 with London-based blockchain company Clearmatics.
Later BNY Mellon, Deutsche Bank (TIKER: DB.NYSE), Santander (TIKER: SC.NYSE) and brokerage ICAP joined the project.