When bitcoin first emerged banks didn’t want anything to do with it. But a few years down the line and pretty much all of them are looking at it.
Although no British High Street banks currently accept bitcoin — Barclays is tipped to become the first — many of them are experimenting to varying degrees with the record-keeping technology that underpins it, the blockchain.
Earlier this month 9 leading banks formed a partnership, headed by startup R3, to create a common “fabric” of blockchain for mainstream banking — essentially establishing the ground rules.
The blockchain software works like a distributed ledger, recording and enabling transactions. It essentially eliminates the need for a trusted middleman to sit in between an exchange, as the software itself acts as the trusted middleman.
This has the potential to make transactions quicker, cheaper, and easier than currently possible, and also has potential applications for things like issuing shares.
Check out what the banks are up to, ranked from least to most advanced on bitcoin and blockchain adoption.
Lloyds has been one of the quietest when it comes to dealing with bitcoin and the blockchain. The bank has published a guide to the cryptocurrency on its website, but beyond that has only sponsored hackathons dealing with the technology.
The bank is working with blockchain startups in its Techstars Accelerator labs in London, Manchester, and New York.
Barclays has also partnered with one startup that's been through the programme, Safello, and the pair are working on a proof-of-concept using blockchain technology for payment processing. Barclays also has two bitcoin 'labs' above old branches in London.
Barclays' Chief Design and Digital Officer Derek White, who oversees bitcoin and blockchain at the bank, told Business Insider the bank is looking at over 45 experiments using bitcoin's blockchain.
Barclays is also a founding member of the R3 blockchain partnership.
UBS has set up a blockchain lab in London fintech hub Level39 where it is developing its own virtual currency that can be used to settle mainstream financial transactions, according to the Wall Street Journal. The coin is being developed with London company Clearmatics.
UBS' CIO Oliver Bussmann is keenly interested in bitcoin and the blockchain, and is personally mentoring fintech startups in Level39, including some working on the blockchain.
UBS has also launched a competition to find fintech startups to work with, which could involve some elements of the blockchain, and is one of the founding members of the R3 blockchain partnership.