First reported in 2017, the Swiss bank UBS-led project to create a digital cash settlement system is expected to get an investment of $50 million from some of the largest banks around the world. Unnamed sources linked to the project told Reuters May 17, 2019.
Research and Development Almost Complete
The promise of magical Internet money seems to be coming to reality as more and more banks are participating in the crypto industry. Reuters in 2017 reported a project dubbed “utility settlement coin” that was proposed by Switzerland-based UBS Group AG bank and blockchain company Clearmatics.
The initiative was backed by some of the largest banks, including Barclays, Credit Suisse, Canadian Imperial Bank of Commerce, HSBC, MUFG, and State Street.
The project was aimed to create a digital currency settlement system on the blockchain that would aid transactions in the financial markets. The latest updates according to sources working closely with the project revealed that over a dozen banks are investing $50 million in Fnality, the company that would handle the project.
The digital cash settlement system, expected to launch in 2020, would use a stablecoin backed by central bank currency for all transactions. The report stated:
“It would be convertible at parity and backed by cash assets held at a central bank. Spending the digital coin would be the same as spending the fiat currency it is paired with.”
Speaking on the subject, a spokeswoman of Barclays confirmed that the project’s research and development phase had almost concluded.
Banks Finding it Hard to Resist Stablecoins
Many bank officials that had earlier called cryptocurrencies a Ponzi scheme are now playing an active part in the technology’s development. This interest is mostly due to innovative developments in the stablecoins space and offering alternatives to the hyper-volatile crypto markets.
On May 16, 2019, BTCManager reported that a European Central Bank policymaker acknowledged the use of stablecoins for financial institutions while stating that they were more promising than Bitcoin.
Even the sixth largest bank in the world, JPMorgan Chase & Co. were reported to have developed their stablecointo help financial institutions settle transactions over the blockchain.