Bank of New York Mellon (BNY Mellon) and UBS are the latest banks to announce they are exploring the blockchain technology behind bitcoin.
Despite initial negativity towards bitcoin, the number of financial technology companies beginning to support bitcoin, or the at least the blockchain technology it uses, is beginning to increase and reports suggest that even Wall Street is beginning to take notice.
BNY Mellon is using blockchain technology to build an application (app) on its internal network, which the bank’s CIO, Suresh Kumar, told the Wall Street Journal is designed to help identify ways to make transactions more efficient and is also part of the bank’s wider commitment to open source technology. “We want to try it out to see the applicability of (bitcoin) in our business,” Kumar said.
The app uses open source from Bitcoin.org, which senior developer Arun Battu, has been developing and modifying to run on the bank’s internal network. A task, which Battu said has been his biggest challenge because of the requirement to shift from client-server architecture to bitcoin’s P2P model.
The bank intends to use bitcoins for an internal incentive programme which will enable staff to redeem them for gift cards and vouchers. “There is a big mindset change that comes with many of these new technologies,” said Kumar.
Swiss Bank UBS also announced their plans to create a London-based innovation lab in Level39’s HighGrowth:42, to investigate the role of blockchain technology in financial services and work on potential new applications.
“We are moving away from a purely in-house innovation strategy, optimizing collaboration opportunities with the growing FinTech business, start-up and investor community in an open and transparent way,” said Oliver Bussman, CIO, UBS group.
Several reports have suggested that Wall Street’s interest in bitcoin is growing and the most recent link between Wall Street and blockchain technology has been Noble Market, the currency marketplace which calls itself the “capital markets for the blockchain era” and uses Nasdaq’s X-stream trading system.