The tryst between blockchain technology and banking sector is not a secret. over 40 banks, mostly operating in the western world have come together to form a consortium. This banking consortium is working with a well-known fintech services company, R3CEV to create their own version of blockchain. The banks intend to use this proprietary crypto technology to create a network between the banks. With this new blockchain, banks can transfer funds between their branches and other banks across geographical boundaries in as less as an hour.
The new blockchain is intended to replace the existing SWIFT network with a better, faster and inexpensive alternative. While the western banks are busy repurposing the distributed ledger behind bitcoin to serve as a banking channel to handle financial transactions, their Asian counterparts aren’t far behind. According to reports on one of cryptocurrency sites, CoinDesk about 7 Asian banks are currently exploring the use of blockchain technology in their operations.
These banks include Mitsubishi UFJ (MUFJ), Mizuho Bank and SBI Sumishin Net Bank from Japan, South Korean KB Kookmin Bank and Shinhan Bank, Singaporean DBS Bank and the People’s Bank of China.
MUFJ has developed its own crypto-token called MUFG Coin. The bank is reported to be using MUFJ Coin to create a peer to peer exchange and mobile wallet applications similar to bitcoin. Mizuho Bank was the banking partner of now defunct Mt Gox bitcoin exchange. The bank is also part of the international blockchain banking consortium with R3CEV. SBI Sumishin Net Bank is working along with Nomura Research Institute to develop blockchain based banking applications in Japan.
The South Korean KB Kookmin Bank has partnered with Coinplug to develop blockchain based international remittance application to offer a cheap and efficient fund transfer solution for its customers. Streami, a blockchain based money transfer service provider is working with Seoul-based Shinhan Bank.
The DBS Bank’s blockchain project is being jointly developed with Standard Chartered Bank. Both banking institutions are currently involved in research to find potential ways of integrating blockchain technology into their operations.
People’s Bank of China is still in the exploratory phase following the central bank’s announcement about its future plans to create and launch its own digital currency.
The banking sector is serious about blockchain technology as they have come to realize its potential to change the industry. It is just a matter of time before blockchain based solutions are integrated by these banks.
This news was first reported on CoinDesk