13 more banks have joined the coalition of leading Wall Street and City names looking to take the technology that underpins bitcoin to the mainstream financial sector.
Bank of America, BNY Mellon, Mitsubishi UFJ Financial Group, Citi, Commerzbank, Deutsche Bank, HSBC, Morgan Stanley, National Australia Bank, Royal Bank of Canada, SEB, Societe Generale and Toronto-Dominion Bank have all joined the partnership.
It takes the total number of banks involved to 22 and the list reads like a who’s who of investment banking. Founding members of the partnership, first announced 2 weeks ago, include Goldman Sachs, JPMorgan, Credit Suisse, and Barclays.
The alliance is being led by R3, a startup with offices in New York and London headed by David Rutter, the former CEO of ICAP Electronic Broking and a 32-year veteran of Wall Street.
Rutter told Business Insider when the partnership was first announced that the plan is to build the “fabric” of blockchain technology for banking, as well as develop commercial applications for banks and financial firms.
The blockchain is the software that both powers and regulates cryptocurrency bitcoin. In its most basic form, it records ownership of bitcoin — money — and transactions, one person paying another.
Transactions are signed off by the parties involved using the software, then added to the blockchain, a long string of code that records all activity.
Once other transactions are added on in front of an exchange, the transaction is stuck there forever and can’t be changed, in the same way you can’t change a brick once it’s been built into a wall.
The software cuts out the need for a “trusted middleman” to sit in between parties in a transaction as it acts as that middleman. This makes transactions quicker, cheaper, and easier when compared to the current systems banks use.
Banks are therefore keen to see if it can be adapted for use with traditional currency, rather than just bitcoin.
The blockchain uses open ledger technology, meaning all of these transactions are free for anyone to look at and not stashed in some private data centre in Canary Wharf. Anyone can theoretically check to see if someone’s using stolen bitcoin and this adds a level of transparency to the system.
Rutter said in an emailed statement today:
The addition of this new group of banks demonstrates widespread support for innovative distributed ledger solutions across the global financial services community, and we’re delighted to have them on board.
We have placed an emphasis on working with the market from day one, and our partners recognise that a collaborative model is the best way to quickly, efficiently and cost-effectively deliver these new technologies to global financial markets.
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