The biggest banks in the world seem to be creating their very own blockchain business, and they may be trying to avoid the volatility that’s featured by Bitcoin and other altcoins.
100% backed by central banks
The banks are launching a platform that’s designed to use blockchain-based currencies that are 100% backed by central banks.
USC is the Utility Settlement Coin, and it’s a project that will be initially supporting USD, CAD, EUR, GBP and JPY worldwide for commercial institutions and central banks, according to the latest reports coming from the Daily Hodl.
The new company is called Fnality International, and it includes the following project partners and founding shareholders, as reported by the Daily Hodl:
Banco Santander, BNY Mellon, Barclays, CIBC, Commerzbank, Credit Suisse, ING, KBC Group, Lloyds Banking Group, MUFG Bank, Nasdaq, Sumitomo Mitsui Banking Corporation, State Street Corporation, and UBS.
According to a report by Nikkei cited by the online publication mentioned above:
“Fnality will set up accounts at participating central banks and issue utility settlement coins, or USCs, digital equivalents of major currencies that can be converted into their paired currencies on a one-to-one basis.”
The report continues and says: “When a client transfers money from Japan to the U.S., a Japanese commercial bank transfers the specified amount of yen to the country’s central bank. Fnality then issues the equivalent amount of USCs, depositing them into an account at a specified American commercial bank. This bank immediately sends the equivalent amount of dollars into the end client’s personal account.”
Fnality will be also working with regulators in order to make sure that they are fully complying with the state laws.
Direct competition for Ripple and Stellar
Other DLT financial systems such as RippleNet and IBM World Wire which is backed by Stellar are exploring their networks and using the tech in order to settle cross-border transactions in a matter of minutes.
Bitcoinist calls the new coin an ‘XRP killer.’
It seems that traditional players are developing a new blockchain infrastructure that will be benefiting from the advantage of digitizing dollars while avoiding the volatility of crypto.