Banks are working together on a new currency for instant settlements as well as continue investing in existing ones.
British Barclays and HSBC, Swiss Credit Suisse, Canadian Imperial Bank of Commerce, Japanese MUFG и American State Street are planning to launch a cryptocurrency called ‘utility settlement coin’ (USC).
Development began in 2017 under the leadership of the Swiss bank UBS and Clearmatics Technologies. Later, BNY Mellon (New York), Deutsche Bank, and Spanish bank Santander took part in the creation.
Now, according to the Financial Times, development banks are discussing the currency with market participants and are working to protect the new currency from hacker attacks.
The new system is scheduled to launch in 2020. In the early stages of the project, according to the agency, UBS, Bank of New York Mellon, Credit Suisse, Barclays, Banco Santander, HSBC, and Deutsche Bank were mentioned. The leading US financial holding JPMorgan has developed its stable coin called JPM Coin.
JPM Coin was created by the bank’s engineers and will be tested as part of a broader JPMorgan corporate payments initiative, where the bank processes $ 6 trillion of transactions daily.
As the head of blockchain development at JPMorgan, Umar Farouk, noted, the organization sees widespread use of blockchain technology in the future, but before that happens, it needs a method that would provide money transfers at the same speed as smart contracts.
He also highlighted three main uses for JPM Coin: cross-border payments for large corporate clients, which now primarily occur using obsolete networks like Swift, to transfer securities and to replace dollars that corporations hold in JPMorgan vaults.
According to Farouk, each unit of JPM Coin will be backed by USD. Clients will receive tokens after the money is deposited in the bank, and upon completion of all necessary calculations, JPMorgan will destroy them, returning the deposits to the owners.